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Unfazed over a dent of Rs 37,000 crore due to duty cuts on fuels, the indirect tax division of the finance ministry is quite confident that it will be able to meet the target for Rs 3.97 lakh crore this financial year by toning up administration to identify service tax evaders.
“Duty cuts for petroleum products will hit the exchequer to the tune of Rs 49,000 crore in a year. As part of it would have been devolved to states, the Centre will take a hit of Rs 26,000 crore on a net basis,” Central Board of Excise and Customs Chairman S Dutt Majumdar said, on the sidelines of a function to mark 150 years of the Income Tax Department
For the first quarter of this financial year, customs duty and service tax collections rose 33 per cent each, while excise duty mop up was up by 27 per cent year-on-year.
Altogether, indirect tax collections were up 30 per cent in the first quarter, Majumdar said. The first quarter collections figure shows there is no slow down in the economy, the CBEC chairman said, adding “though the hit from duty cuts will be felt now”.
Late last month, the Centre has cut import duty on petrol and diesel from 7.5 per cent to 2.5 per cent and reduced the excise duty on diesel Rs 2.6 to Rs 2 a litre. The duty cuts were announced when the government raised prices of domestic coking gas, diesel and kerosene (sold under public distribution system).
Majumdar said the board will try to offset the hit by streamlining administration to plug loopholes in tax collections. One of the ways will be to identify those not paying service tax, he said. There are 16 lakh entities registered for this purpose. But, only six lakh entities pay service tax.
“We will identify who are these nine lakh entities that are not paying service tax,” he added.
The Centre has fixed a target to mop up over 17 per cent through indirect taxes over the last financial year’s figures.(BS)
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