Warning to excise evaders

Finance Minister P Chidambaram today asked manufacturing firms to pay excise duty honestly and warned that evasions would be dealt with strongly.

Besides income tax and service tax, Chidambaram is banking on excise duty to meet the target of 17 per cent growth in tax revenue in 2007-08. Excise duty collection is expected to fall short by Rs 2,000 crore from the Budget estimate of Rs 1,19,000 crore for the current fiscal.

"I am inclined to believe there is sizable evasion in central excise. Evading duties does not pay in the long run," Chidambaram said while launching a simplified electronic accounting system for central excise and service tax called EASIEST.

There has been a steep rise in corporation tax and service tax collections but not in central excise. Urging companies to pay excise duty just as they are paying corporation tax and service tax, he warned that "One black mark will haunt you throughout the year."

With economy growing close to 8.5-9 per cent and manufacturing by double digits, excise must also grow at the same rate, he added.

Chidambaram added that the government intended to devote greater attention to central excise duty collection in 2007-08. Some deterrent provisions have already been taken and more steps may be taken to check tax evasion. "The safer course is to pay taxes," he added.

From April 1, all firms that are paying Rs 50 lakh and above in excise duty have to mandatorily file their returns online and make e-payments.

EASIEST uses the electronic environment for faster transmission of tax information to ensure greater accuracy and reliability of tax payment data.