With increased focus on revenue generation from service tax, officials have detected several cases of tax evasion amounting to about Rs 8,000 crore during 2013-14 fiscal which ended last month.

Finance Ministry officials said service tax was being evaded by a number of small and big service providers across the country through non-filing of mandatory returns, wrongful declaration of amounts collected by them and other means.

The Directorate General of Central Excise Intelligence (DGCEI) had registered 1,144 cases of service tax evasion during 2013—14. The amount involving the cases of service tax evasion was Rs 7,928.22 crore during the period, they said.

The service tax detection amount of about Rs 8,000 crore does not include cases registered at various service tax and excise commissionerates and other allied offices across the country, the officials said.

“Service tax has been a focus area for the government. A number of service tax evasion cases has been registered across the country during the last fiscal,” a Finance Ministry official said.

The DGCEI had detected 841 service tax evasion cases involving government’s revenue of Rs 4,693 crore in 2012-13.

The Directorate had realised Rs 880 crore from these cases, they said.

According to a Finance Ministry data, there has been an increase of over 300 times in revenue collection from service tax in the past two decades.

The ministry had collected Rs 1.32 lakh crore as service tax revenue during 2012-13 as against Rs 407 crore in 1994-95, it said. About Rs 97,509 crore of service tax revenue was collected during 2011—12.

The tax officials are taking strict action against all evaders after a first-of-its-kind amnesty scheme for service tax defaulters ended in December last year.

The Voluntary Compliance Encouragement Scheme, which was implemented from May 10 last year, was announced by Finance Minister P Chidambaram to allow a service tax defaulter to pay dues without any penalty or late fees.

Under the scheme, a person was to make a declaration to the designated authority on or before December 31, 2013.

A total of 66,062 applications were received under the VCES scheme, amounting to a tax collection of Rs 3,961.51 crore, as per the ministry’s data.

(This article was published on April 6, 2014)
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