Govt to use audits for tracking excise evasion

Concerned over continued low growth in excise duty collections, Finance
Minister P Chidambaram today said third party information, including
from states and high impact audits, will be used to nail excise duty
evaders.

As part of the anti-evasion measure, the finance ministry has written to
states seeking information on value added tax (VAT) collection trends,
which would then be compared with excise duty collection trends.

"If trends reflect an upswing in VAT collection, there should be an upswing in excise duty collections," Chidambaram told reporters here on the
sidelines of a conference of excise and customs officials.

While VAT collections by states have increased 25%, excise duty collections have gone up only 6.8% in the first quarter of the current fiscal. Excise duty is levied till manufacturing stage while VAT is levied in the post-manufacturing stage.

In class of products, specific industries and specific cities, excise collections should reflect or run parallel to VAT collections, the minister said.

High impact audits will be undertaken in product categories or industries
which are known to be prone to tax evasion, he added.

According official sources, steel and gutkha industries are among the
select list of tax-evasion prone categories. The revenue department will also publicise the name of some defaulters to discourage others from taking the path of tax evasion.

Chidambaram also said there would be a re-look at the current Cenvat credit system to ensure that the scheme is not misused by companies.

Chidambaram expressed satisfaction on the overall revenue performance
between April-June."With the economy growing over 9%, the indirect tax budget estimate of Rs 2,78,013 crore for 2007-08 is likely to be exceeded," he added.