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Service Tax Evaders can’t Escape Forever, Warns Chidambaram

Giving a stern warning to tax evaders, Finance Minister P. Chidambaram on Monday said they cannot escape from the tax department forever, as it has all the tools to nab them.

“We have a lot more information. We have permanent account numbers. We are receiving data from other sources. We have a Financial Intelligence Unit. We have a dedicated group of individuals putting all the information together to profile an individual,” Chidambaram said while inaugurating the Delhi leg of his interaction with trade and industry on the Service Tax Voluntary Compliance Enforcement Scheme.

His warning was directed towards 10 lakh assessees who had stopped filing service tax returns. These are people who were either not paying or had stopped paying service tax. “Evaders may get away for a day, months, a year or couple of years, but we will reach you,” he cautioned. It may be recalled that there are 17 lakh registered service tax assesses, but only seven lakh have been filing returns.

To bring back non-filers, the Finance Minister had launched a Voluntary Compliance Scheme in the Budget. This scheme has been operational since May 10, and will continue till December 31. The scheme offers ‘no penalty, no interest’ and provides one-time opportunity to the defaulters to come clean. Under it, the defaulters have to pay at least 50 per cent arrears for the five-year period ending 2012 and the balance in another six months without interest.

Delhi contributes to one-fifth of the total service tax collection. However, just 506 applications have come from Delhi out of over 5,000 applications received from across the country. The National Capital is behind Mumbai and Ahmedabad in terms of applications received under the scheme.

However, the Finance Minister is hopeful that things will improve not just in Delhi but across the country as people tend to file in the last few days. But, he advised trade and industry to do so immediately. “No advantage in not paying tax, but there is great advantage in paying tax,” he said, while adding that this was the last opportunity to come clean.

Business Line, New Delhi, 12-11-2013

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