Excise dept after service tax extorters
CHARGING EXCESS fee in the name of service tax from customers could land city?s courier agencies in a serious trouble soon. The Department of Excise, Customs and Service Tax, Lucknow Circle which is already in the process of identifying service tax evaders has plans of nabbing owners of courier agencies who are charging excess fee in the name of service tax from customers for rendering a wide variety of services.india Updated: Apr 03, 2006 00:48 IST
CHARGING EXCESS fee in the name of service tax from customers could land city’s courier agencies in a serious trouble soon.
The Department of Excise, Customs and Service Tax, Lucknow Circle which is already in the process of identifying service tax evaders has plans of nabbing owners of courier agencies who are charging excess fee in the name of service tax from customers for rendering a wide variety of services.
The prime target for service tax sleuths is not only courier agencies, but also a large number of other commercial organisations which charge a fee for services that is well beyond the quantum of service tax required to be collected from customers. The names of persons who are identified for charging excess service tax would also be passed on to the Income Tax Department for further scrutiny, a senior official informed.
He said many courier agents deliberately keep customers in the dark about the quantum of service tax and show the excess fee as transportation or fuel charges to hoodwink taxmen. A few months back, the branch manager of a large courier company was questioned by the sleuths after they found anomalies in the account books with tax charged on certain items which do not come under service tax regulations at all.
“Very few customers actually check the exact rate of service tax for the facility availed. They just pay the amount charged by the trader or the courier agent and walk away from the shop”, the official said.
There are about 200 small and big courier agents operating in the city. There is not much data on the quantum of actual service tax being charged and the service tax returns filed by the courier agents, the official added.
The courier agents—especially the bigger ones have the accounting wherewithal to escape scrutiny of service tax sleuths at times, the smaller ones aren’t aware of the problem they might face if they were caught fudging accounts in case of a raid in their premises, sources said.
Not many raids have taken place in the service tax domain in the past six months which had bolstered the confidence of ‘evaders’ as the Department continues to struggle with skeletal staff trying to keep a watch over a huge list of service tax payers in the Lucknow Circle.
The Excise, Customs & Service Tax Department has now started a direct mailing system for registration of service tax payers in the circle. While the concept has been a success, there have been many service tax evaders who deliberately tried to avoid registering themselves as that would make them pay taxes every quarter to the Department.