The Hindu : New Delhi News : Property of tax evaders can be attached: government

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Thursday, Jul 03, 2008
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New Delhi

Property of tax evaders can be attached: government

Ashok Dasgupta

NEW DELHI: In a bid to stem the rising tax evasion, especially by exporters and certain large manufacturers, the Union Government has announced that the properties of tax evaders could be provisionally attached by the authorities to recover such dues.

In a circular issued here, the Central Board of Excise and Customs (CBEC) said the property of manufacturers and service providers evading taxes could be attached by taxmen for a period up to two years to recover the dues.

However, the provisional attachment of property would be resorted to only in cases where the service tax or Cenvat credit alleged to be involved is over Rs. 25 lakh. Also, such action was to be taken only after the issue of show-cause notice and subject to the approval of the Commissioner of Central Excise.

The stringent decision had come in the wake of Finance Minister P. Chidambaram’s recent meeting with Commissioners of Central Excise and Customs in which concern was expressed about the dip in excise duty collections, especially owing to claims of Cenvat credit by way of fake documents.

Cenvat credit

While the government pays back the Cenvat credit to exporters to set off the duties already paid on inputs, the CBEC circular noted that the property of tax evaders could be attached for indulging in sale of taxable services without payment of tax, under-invoicing of goods, and availing themselves of Cenvat credit without receipt of goods or services or through fake invoices in a fraudulent manner.

The CBEC also made it clear that action could be taken against those tax officials who attach property on frivolous grounds.

The circular noted that only immovable property which was used for commercial purposes might be provisionally attached while personal property would be spared.

However, movable property could also be attached if the immovable property available for attachment was not sufficient to recover the tax dues, it said.

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