Cenvat claims to be looked at closely: FM
The Finance Minister says Cenvat claims by companies would be monitored stringently in a bid to check its abuse.india Updated: Aug 31, 2006 20:34 IST
Finance Minister P Chidambaram on Thursday said that excise department would keep a close watch on Cenvat claims by companies in a bid to check its abuse.
"We have asked the excise department to look at Cenvat availment very closely. We must make sure that Cenvat availment is not taken more than what is entitled," Chidambaram told reporters after chairing All India Conference of Chief Commissioners of Customs, Excise and Service Tax.
He said Cenvat claims, which are growing at a rate of 26.1 per cent during the first four months of this fiscal, are not a cause for concern and partly attributed the high level to four per cent countervailing duty imposed on imports this fiscal.
The department has been asked to closely monitor the Cenvat claims since excise duty collections fell short of target last fiscal because Cenvat availment was much higher than the department's target.
For the first four months of this fiscal, all the indirect taxes collections -- customs, excise duties and service tax -- are higher than the target.
Against the target of 18.1 per cent for the whole year, customs duty collections showed a growth of 33.5 per cent.
Excise duty collections grew by 8.8 per cent against the target of 6.1 per cent and service tax by 63.4 per cent against 43.5 per cent, he said.
"If the trend is maintained, if pace of collections picks up in the second half of this fiscal, the board (CBEC) is confident that as of now it would reach the budgeted figure," he said.
Of the total indirect tax collection target of Rs 2,29,533 crore, excise alone accounts for more than half at Rs 1,17,967 crore, he said.
Chidambaram said the department has got permission of ad hoc appointment of 1,400 people since it is facing manpower shortage. As many as 17 personnel on an average are required for each SEZ, he added.
"We are working on a plan to increase manpower of the department. We will go to the Cabinet to seek its approval for the purpose," he said.
Among various initiatives taken by the CBEC, a pilot project for service tax collections through post offices has been started in Delhi, he said.
"We have also started e-auction of uncleared and unclaimed goods, which is yielding good results," he said.
Besides, 5.5 million documents are processed annually online through EDI system, which have been set up in 35 major customs locations, accounting for 25 per cent of the country's trade, he said.