CBEC seeks details of service tax payment from companies

Racing against time to meet revenue collection target, tax authority CBEC has started seeking details of service tax from companies which have paid the same amount as last year or even less than that.

The Central Board of Excise and Customs (CBEC) has written to such companies to furnish documents regarding the nature of services provided by them, tax paid etc. within 10 days of the receipt of the letter.

Besides, the companies have also been asked to submit copies of agreement, works order, contracts, invoices in case of non-taxable service, customer ledger and the trial balance for the period between April and November 2012.

"The documents ... may be furnished to this office within 10 days of the receipt of this letter for detailed scrutiny in order to determine reasons for shortfall in service tax revenue," a letter issued to one of the companies said.

CBEC is of the view that the service tax payment in the current financial year should have been higher on account of increase in tax rate from 10 per cent to 12 per cent in Budget 2012-13.

"This implies that even if there is no growth in turnover of taxable services during the latter period, the tax payment should go up by 20 per cent," it said in the letter.

JK Mittal, co-chairman of indirect taxes council at Assocham said, "Government authorities cannot be allowed to act arbitrarily...the Department has not examined data and sent letters indiscriminately to companies."

Last week, CBEC had issued a stern warning to service tax evaders saying that it would attach properties of companies which fail to deposit the amount collected as tax by them form consumers.

Service tax department had detected tax evasion of Rs 9,800 crore in the first nine months of 2012-13, as against Rs 5,000-6,000 crore in the corresponding period last fiscal year.

The government proposed to collect Rs 1.24 lakh crore from service tax in the current financial year, up from Rs 95,000 crore in the previous fiscal, envisaging an increase of 30 per cent.

While excise has yielded Rs 1,08,470 crore during April-November, collection from customs and services tax worked out to be about Rs 1,04,864 crore and Rs 78,774 crore respectively.

During the first nine months of the current fiscal year, the service tax collections has witnessed a growth of 34 per cent, CBEC said.