In a stern message, the finance ministry on Wednesday warned the entities evading payment of excise, Customs and service tax of actions which may lead to even arrest and prosecution if they didn’t pay taxes.
Revenue department officials at the field level are known to indulge in pressure tactics around this time of the year —every year — to garner taxes from the companies to meet their targets. This year, however, the message is coming directly from the North Block.
“While our department is making every possible effort to facilitate trade and industry, a number of tax payers/assessees are still not doing their part by paying their due taxes in a timely manner and complying with the law,” Revenue Secretary Sumit Bose said in a statement.
According to Bose, a number of central excise assessees continued removing goods clandestinely, sometimes even without registration, misusing the Cenvat credit or simply not paying the central excise duties, which were due to the government, in disregard of the law.
The finance ministry is keeping a close watch on such elements and has advised them 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 per cent, suspension of Cenvat credit, provisional attachment of property, and arrest and prosecution,” said Bose.
Last month, the revenue secretary had issued a similar warning to the income tax assesses and had asked them to disclose their true income or risk getting a notice from the income tax department.
In August 2012, Finance Minister P Chidambaram had said after attending a meeting of senior excise, Customs and service tax officials that the department would not hound the taxpayers and would be friendly to honest taxpayers.
In his statement on Wednesday, Bose said that in case of service tax, the ministry had noted that many service providers had not registered themselves despite coming in the tax net and more than half of the service providers who were registered with the revenue department were not filing returns.
The department also has information about service providers 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,” said Bose.
On the Customs side, some unscrupulous elements were already on the radar of DRI (directorate of revenue intelligence) and intelligence wings of the Customs department, added Bose, warning that the tax evaders of similar consequences as in the case of excise and service tax.
“In these times of electronic availability of transactional and financial data from various sources on real-time basis, let me emphasise that it is not difficult for the tax authorities to reach the doors of those who are evading tax payment,” said the revenue secretary.