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Wednesday, July 9, 2014

Government clears expansion of DGCEI across the country

The FM has cleared creation of new intelligence units across the country and appointment of over 8000 personnel to check any leakage in its earnings from the indirect tax. Anticipating increase in service tax revenue, the ministry  has also decided to restructure DGCEI – a body tasked with checking excise duty and service tax evasion, official sourses said.

 There will be three more zonal units of the DGCEI in Lucknow, Bhopal and Hyderabad. These three zonal units will have three regional units each as well, they said. “The government has approved total nine zonal units and 27 regional units of the DGCEI to check leakage of excise duty and service tax evasion” a Finance Ministry official said.  At present DGCEI has six zonal units and 18 regional units.
 The move has come in the wake of the government witnessing a growth in the service sector and increase in the service sector and increase in the number of taxable services. Although service tax has shown tremendous potential as an area of tax collection, it still remains a largely untapped and unexplored sector. The contribution of service tax to the gross tax revenue at a mere 13 percent is not commensurate with the contribution of service sector to the DDP of our country which was more than 60 per cent in the last financial year. It is, therefore, essential to provide more manpower for service tax related matters”, according to a intra-ministry communication on the issue.
 It is pertinent to mention that strengthening and expansion of the existing DGCEI formations is a better solution, in the long run, to effectively curb the ever increasing menace of central excise duty and service tax evasion than bifurcating it into two, the communication said. The DGCEI has, over the period of time, developed requisite expertise in cultivation and nurturing of a credible informer base and therefore enjoys an edge in gathering information, developing them into actionable intelligence and investigating cases of service tax evasion leading to recovery of government dues, it said. 
 The DGCEI , as the apex intelligence organization as far as central excise duty and service tax evasion matters are concerned, is well known and trusted by the informers. “Informers, who work on trust, may not start giving information to a newly created intelligence organisaition from day one, thereby creating a kind of vacuum,”, the communication reads.
 The DGCEI has detected RS. 8,000 crore of service tax evasion during 2013-14. 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.

 Source: zeenews.india.com

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