Indirect Taxes - Revenue Secretary Shows Whip - Bose is Boss - Issues Stern Warning to Indirect Tax Evaders
IN a statement made to the media yesterday, the Revenue Secretary, Sumit Bose issued a stern warning to indirect tax evaders to pay up or else… He is the boss; he knows what to do.
Central Excise: The Revenue Secretary observes that that a number of Central Excise assessees continue removing goods clandestinely, sometime even without registration, misusing CENVAT Credit or simply not paying Central Excise duties which are due to the Government, in disregard of the law. He is keeping a very close watch on such elements. They are advised to come forward to pay all due taxes and avail of the benefit of reduced penalty. If they fail to do so, they should be ready for the consequences, which include:
- Recovery of duty along with interest and penalty up to 100%.
- Suspension of CENVAT Credit
- Provisional attachment of property, and
- Arrest and Prosecution
Service Tax: The Revenue Secretary says, "all services are taxable with effect from 1.7.2012, except those in the Negative List and exempted services. However, a number of service providers who should be paying service tax now have not yet registered themselves. It is also noticed that more than half of the service providers who are registered with us are not filing returns. The Department has also gathered information that a number of service providers are collecting service tax from the receivers of service but not depositing the tax with the Government. Let me warn them that all such service providers will not only be liable to pay the service tax along with interest and penalty which may be equal to the service tax evaded, but they can also be prosecuted for these offences. Money due to them from a third party can also be appropriated by the Government".
Customs: exporters are indulging in under-invoicing in import/over-invoicing in exports and mis-declaration of goods and are misusing exemptions and various incentive schemes, to evade customs duty. When 70 per cent of the consignments are being cleared by Customs on self assessment basis, without any assessment and examination by the Department, it is incumbent upon the importers/exporters to discharge their correct duty liability. Some unscrupulous elements are already on the radar of DRI and intelligence wings of Customs houses. Such importers and exporters should be ready to face legal consequences including arrest and prosecution besides payment of duty with interest, fine and penalty up to 100% of duty evaded. The only window for them is to come forward and deposit the duty now and avail of the benefit of reduced penalty.
The Revenue Secretary emphasized that in these times of electronic availability of transactional and financial data from various sources on real time basis, it is not difficult for the tax authorities to reach the doors of those who are evading tax payment.
He urged all assessees to ensure that they make timely and correct payment of customs duty, central excise duty and service tax for continued trade facilitation.
While the Revenue Secretary's exhortation and warning mean well, it is a little puzzling as to why they don't go ahead and book all those evaders whose information, he says he has? We don't need to show any leniency towards the established evaders.
But Mr. Secretary, can you prevent your officers from their harassment of genuine businessmen who are ready to pay the taxes, if there is clarity in the laws. Just for record, your officers book hyperactive technical hair splitting and nit picking cases - your senior officers confirm demands with least or no application of mind and now your Board wants to kill industry and trade in India by killing judicial process and vexatious arrears collection.
Believe me Mr. Secretary - you close down your Customs and Central Excise Department for the next three months - give all the officers a paid holiday for three months and then make your appeal to the trade and industry that they will not be harassed for three months and request them to pay the maximum possible taxes. YOU will get far more Revenue than what you can ever expect to from these revenue antics of your officers like arrears recovery.