Already burdened with an estimated Rs 49,000 crore annual loss on account of the recent cut in customs and excise duties in petrol and diesel, the Revenue Department has extended the last date for filing online service tax returns by two months till December 26, in an effort to put a lid on rising percentage of service tax evasion cases.
According to Finance Ministry sources, assessees were supposed to file their service tax returns online by October 25, however the two-month extension has been given as the department wants to pinpoint the exact number of tax evaders and track down the profile of these defaulters.
“Of the total 15 lakh registered service tax payers, currently only six lakh are filing their returns. The issue is that who are these nine lakh defaulters, who have gone missing? This was the reason why we made filing of service tax returns online from this financial year mandatory,” a senior Government official said.
Till 2004, there was no exemption limit for service tax payers in the country, however now there is a one time service tax exemption limit of `10 lakh in a financial year.
The Revenue Department has also developed a software named Automation of Central Excise and Service Tax (ACES) for electronic filing of returns, through which it can track documents of the defaulters. Till last year, the service tax collection process was done manually, which was prone to several loopholes and allowed tax evaders to get away.
Finance Ministry sources said that the two-month period will not only give time to the Revenue Department to track defaulters, it will also allow assessees with more time to file their returns, especially as the online system has been introduced for the first time and a large number of people are not accustomed to it.
In June this year, the Government, while increasing prices of diesel, domestic LPG and kerosene, removed the 5 per cent Customs duty on crude oil, brought down the import duty on petrol and diesel from 7.5 per cent to 2.5 per cent and reduced the excise duty on diesel by `2.60 to `2 per litre.
It was estimated that this move would lead to an estimated annual loss of `49,000 crore to the Government during the current financial year. In addition to this, the service tax collection target for this year has been upwardly revised from the original `82,000 crore to `90,000 crore.
Amid this scenario, the department took the decision of making filing of service tax returns online, and also extending its deadline.
According to Finance Ministry sources, assessees were supposed to file their service tax returns online by October 25, however the two-month extension has been given as the department wants to pinpoint the exact number of tax evaders and track down the profile of these defaulters.
“Of the total 15 lakh registered service tax payers, currently only six lakh are filing their returns. The issue is that who are these nine lakh defaulters, who have gone missing? This was the reason why we made filing of service tax returns online from this financial year mandatory,” a senior Government official said.
Till 2004, there was no exemption limit for service tax payers in the country, however now there is a one time service tax exemption limit of `10 lakh in a financial year.
The Revenue Department has also developed a software named Automation of Central Excise and Service Tax (ACES) for electronic filing of returns, through which it can track documents of the defaulters. Till last year, the service tax collection process was done manually, which was prone to several loopholes and allowed tax evaders to get away.
Finance Ministry sources said that the two-month period will not only give time to the Revenue Department to track defaulters, it will also allow assessees with more time to file their returns, especially as the online system has been introduced for the first time and a large number of people are not accustomed to it.
In June this year, the Government, while increasing prices of diesel, domestic LPG and kerosene, removed the 5 per cent Customs duty on crude oil, brought down the import duty on petrol and diesel from 7.5 per cent to 2.5 per cent and reduced the excise duty on diesel by `2.60 to `2 per litre.
It was estimated that this move would lead to an estimated annual loss of `49,000 crore to the Government during the current financial year. In addition to this, the service tax collection target for this year has been upwardly revised from the original `82,000 crore to `90,000 crore.
Amid this scenario, the department took the decision of making filing of service tax returns online, and also extending its deadline.
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