Improve mop-up: FM to excise, customs dept

Finance Minister P Chidambaram today asked chief commissioners of customs and excise to undertake measures to improve excise duty collections and take strict action against the evaders.

Lower growth in excise collection remains the major focus of the two-day conference of chief commissioners, with excise collections at Rs 30,095 crore registering a growth of only 5.69 per cent against a requirement of 19.91 per cent, to attain the Budget target of Rs 1,18,268 crore for 2005-06.

According to the data available with the finance ministry up to July 2005, only four excise zones "" Ranchi, Kolkata, Mysore and Lucknow "" have managed to mop up excise higher than the moving target up to the month.

Zones like Mumbai-I, Pune, Vadodara, Cochin, Chandigarh, Coimbatore and Shillong are over 20 per cent short of the moving target while Nagpur, Hyderabad, Chennai and Bhopal are over 15 per cent short of the moving target up to July. Delhi and Jaipur are also over 10 per cent short of the moving target for the first four months of the fiscal.

One of the reasons for the lower-up from excise is the higher availing of of Cenvat of Rs 5,838 crore up to June due to increased exports, negative growth in sectors like cement and cigarettes, increase of over 18 per cent on account of duty foregone under export promotion scheme and higher outgo of Rs 619 crore due to refunds or rebates.

Excise collection has also been lower due to revenue growth of only 11.61 per cent in the petroleum sector against 20 per cent up to June last year.

Concessions in the budget have also led to lower collections of Rs 535 crore in case of textiles and Rs 474 crore in case of LPG for domestic use up to June, 2005.

As part of efforts to check evasion, the ministry is considering setting up of separate service tax cell in each zonal unit and expanding the strength of the Director General of Central Excise Intelligence.

Other measures include strengthening of informer network, developing strategic intelligence for specific units, specific sectors and specific industries.

Commodity specific studies with an anti-evasion perspective are also being undertaken with five such studies having been completed in the last one year. Specific study on area based exemption is also being carried out to detect evasion by units located in these areas.