Lok Sabha Question No. 290 (UNSTARRED), answered on 2017-02-03
Subject: Outstanding Taxes against Companies
Ministry: FINANCE
Asked by: GOPAL CHINAYYA SHETTY

## Government of India Ministry of Finance Department of Revenue

## LOK SABHA UNSTARRED QUESTION NO. 290

TO BE ANSWERED ON FRIDAY, FEBRUARY 3, 2017 MAGHA 14, 1938 (SAKA)

## OUTSTANDING TAXES AGAINST COMPANIES

## 290: SHRI GOPAL SHETTY

Will the Minister of FINANCE be pleased to state:

- (a) the  details  of  central  taxes  outstanding  against  domestic  and  multinational companies as on date, company-wise;
- (b) whether the Government has taken note of the number of companies involved in evasion of excise duty;
- (c) if  so,  the  details  of  such  companies  and  the  action  taken  against  the  said companies;
- (d) the steps taken by the Government for expeditious recovery of outstanding taxes; and
- (e) the time by which the said outstanding taxes are likely to be recovered?

## ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SANTOSH KUMAR GANGWAR)

(a) The  Company wise details of Central taxes outstanding against domestic and multinational companies is not maintained centrally. The details of total outstanding arrears, as on 31.12.2016 are as under:-

| Tax component       |   Amount involved (Rs. in crore) |
|---------------------|----------------------------------|
| Corporate Tax       |                           471489 |
| Central Excise Duty |                            81346 |
| Customs Duty        |                            26124 |
| Service Tax         |                           110179 |
| Total               |                           689138 |

(b & c). The number of cases of evasion in Central Excise detected during the last three years and current year (upto October, 2016) is as under:-

| Year              |   No. of cases |   Amount involved (Rs. in crore) |
|-------------------|----------------|----------------------------------|
| 2013-14           |           2604 |                          4736.59 |
| 2014-15           |           2123 |                          4334.8  |
| 2015-16           |           2366 |                          5296.84 |
| 2016-17(upto Oct) |           1173 |                          2990    |

When any evasion/fraud is detected, after due investigation, such company is issued  a  Show  Cause  Notice  demanding  the  duty  evaded.   After  following  the principles of natural justice, the Show Cause Notice is adjudicated and as provided in the Central Excise Act, 1944, the amount due is recovered.

- (d). Direct Taxes: Strategies and targets to collect the arrears of taxes are laid down  in  the  beginning  of  every  financial  year  as  part  of  the  Central  Action  Plan document. Efforts of the assessing officer to collect/recover the outstanding demand are regularly reviewed/monitored by the superior authorities. Databases like Individual Transaction Statement and 360-degree profile generated by the Department and those maintained by other agencies like FIU-IND have been made available to the field units for identification of assets for recovery. Guidelines for Tax Recovery Officers for recovery and guidelines to filed authorities for dealing with stay petitions have been issued. Efforts for early disposal of appeals are also undertaken. A new reward scheme for  information  leading  to  recovery  of  arrears  has  been  notified.  The  names  of confirmed defaulters are also placed in public domain.

Indirect  Taxes: Recovery  of  Indirect  taxes  is  done  in  terms  of  Section  11  of  the Central Excise Act, 1944 and Section 142 of the Customs Act, 1962, to the extent it applies to Central Excise Duty and Service Tax.  In all cases of evasion/fraud, action, as  provided  under  the law  is  taken  for  detection  and  recovery  of  Government  dues. Besides, to  realize/liquidate  the  indirect  tax  arrears,  the  following  Action  Plan  has been implemented by the Central Board of Excise and Customs.

- (i)    Wherever  substantial  amounts  of  arrears  have  been  locked  up  in  cases pending before Courts/appellate fora, early hearing petitions are filed and efforts are  made  to  vacate  stay  orders.  Cases  of  similar  nature  are  being  bunched  for expeditious disposal by the appellate authorities.
- (ii)  The  cases  pending  before  Board  for  Industrial  and  Financial  Reconstruction, Debt Recovery Tribunal, Official Liquidator etc. are being actively followed up.
- (iii) Wherever revenue arrears are free from all legal encumbrances, action is taken for speedy implementation of favourable orders passed by Courts. Where no stay has  been  granted  or  the  stay  granted  has  lapsed,  prompt  action  is  taken  for realisation of arrears by attachment of movable/immovable assets of the defaulters or recovery from sums due to such assessees.
- (iv) Dedicated  teams  of  officers  have  been  created  in  the  field  formations  for expeditious recovery of indirect tax arrears.

(e). All  efforts for expeditious recovery of outstanding direct and indirect taxes are being  made.  However,  no  time-frame  for  complete  recovery  of  all  arrears  can  be specified. Fresh direct tax demands are created and recoveries of arrears made in an on-going basis. Moreover, the Revenue Department has limited control on the timeframe of recovery where the tax demand is litigated before an appellate authority.

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