Ahmedabad, Bengaluru, Bhopal, Bhubaneswar, Chandigarh, Chennai, Kochi and Coimbatore have been ranked the top eight tax zones by the Central Board of Excise and Customs (CBEC) in a first-of-its-kind initiative to push revenue collection across the country.
Since the exercise began in August, the CBEC has been able to increase its revenue by 3-3.5 per cent a month. A senior official told The Indian Express that the exercise was initially started for the service tax wing. But encouraged by the “3-3.5 per cent revenue augmentation through the exercise, it has been emulated by the excise department too”.
The initiative is expected to usher in administrative change and augment revenue by fostering competition among different zones, the official said.
The ranking of zones have been done on parameters including recovery of past arrears, audit recovery, anti-evasion recovery, scrutiny of returns and detailed manual scrutiny.
“The zones for service tax collection have been ranked for the last three months. It has been found that the exercise actually led to an improvement in revenue collection by up to 4 per cent. So, the excise department has also started the exercise and now the CBEC is considering making it a monthly event,” the official said.
According to the August findings, Ahmedabad, Bengaluru, Bhopal, Bhubaneswar, Chandigarh, Chennai, Kochi and Coimbatore performed well on the given parameters. In the ranking done by the excise department too, these zones showed robust growth as per the parameters.
Indirect tax collection for 2015-16 has been pegged at Rs 6.48 lakh crore, an increase of about 19 per cent over the last fiscal.
Experts said that while the move will bring in discipline in the monthly collection, the department has to ensure that field officials don’t resort to aggressive measures in a bid to be ranked higher.
“After the cadre restructuring, the number of commissionerates has gone up, thereby making each commissionerate more focused, catering to relatively small number of assessees. This has also made targets more clear. This is a good move as it will ensure that the huge pressure that is built on assessees towards the end of the fiscal — in January, February and March — where even refunds are stopped, will come to an end,” Bipin Sapra, partner, Ernst & Young, said.
“Since officials will undertake these exercise on a regular basis, it will ensure that the industry will function smoothly without the enhanced scrutiny towards the end of the fiscal,” he said, adding that the department will have to ensure that the exercise does not result in unnecessary cases being built for a higher ranking. “It should be monitored so that only genuine cases are targeted,” he said.
Until September, the indirect tax department had collected 49.7 per cent of the budget estimate in customs, 55 per cent in central excise and 45.5 per cent of the BE in service tax. During the April-September period, customs collection grew 17.5 per cent, central excise by 69.6 per cent and service tax by 24.3 per cent.
The increase in excise duty and service tax collection was also due to additional revenue mobilisation measures taken by the government, wherein it had increased the service tax rate from 12 per cent to 14 per cent and raised the excise duty on petrol and diesel, levied clean energy cess while doing away with the excise duty concessions given to auto and consumer durables sectors.