Strategy to meet service tax target

The revenue department has finalised a multi-pronged strategy to achieve the revised internal service tax collection target of Rs 22,000 crore for the current fiscal.

The strategy includes re-deployment of 5 per cent existing central excise staff for service tax work and setting up special audit teams for large tax-payers, and a special cell to develop intelligence and investigate cases relating to service tax.

While service tax collections have been buoyant with growth of over 66 per cent up till October, excise collections, so far, have increased by only around 8 per cent. While the overall indirect tax collection target would be met, there is likely to be a marginal shortfall in excise duty collections.

The department had also asked its field formations to conduct special audits in cases where the service providers pay a substantial amount of tax through credit to ensure that the credit availed and utilised by the service providers is valid. The department has asked the re-deployed staff to identify assessees who have not registered themselves under service tax.

"Very often after registration, assessees do not file their return or pay taxes within the stipulated time period. It has, therefore, been decided that the data regarding assessees will be maintained and updated regularly so that cases of non-filing of service tax can be detected," an official said.

Officials said the field formations had been asked to collect information on non-registered assessees from advertisements, yellow pages and trade bulletins. The department had also instructed them to coordinate action between their excise and service tax sections.

"Since many excise assessees receive taxable services, potential service tax payers can be detected while doing excise audit. Joint action between excise and service tax sections will, therefore, help in expanding the tax base," they said.