Lok Sabha Question No. 640 (UNSTARRED), answered on 2016-11-18
Subject: Tax Collection
Ministry: FINANCE
Asked by: RAMA DEVI, HARI BABU KAMBHAMPATI, RAOSAHEB PATIL DANVE, HARISHCHANDRA DEORAM CHAVAN

## Government of India Ministry of Finance Department of Revenue

## LOK SABHA UNSTARRED QUESTION NO. 640

TO BE ANSWERED ON FRIDAY, NOVEMBER 18, 2016 KARTIKA 27, 1938 (SAKA)

## TAX COLLECTION

640: SHRIMATI RAMA DEVI: DR. KAMBHAMPATI HARIBABU: SHRI RAOSAHEB DANVE PATIL: SHRI HARISHCHANDRA CHAVAN:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government proposes to set up taxpayer centres to widen taxpayer base across the country, if so, the details  thereof,  State/UT  and  location-wise along  with the role  and responsibilities assigned to these centres to achieve the said objective;
- (b) whether  the  Government  has recorded  a  steady increase  in the  tax  collected  during  the  last three years and the current year;
- (c) if so, the details of direct and indirect taxes collected and pending collection during the last three years and the current year along with the steps taken/being taken to clear the pendency;
- (d) the details of cases of evasion of direct and indirect taxes reported by informers along with the amount recovered and rewards disbursed to informers during the last three years and current year; and
- (e)  whether  the  names  of  these  informers  are  revealed  by  the  Income  Tax  Department,  if  so,  the details thereof and the corrective steps taken/being taken by the Government to protect the identity of such informers?

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

(a):

Central Board of Excise & Customs has set up the Directorate General of Taxpayer Services with its head  office  at  Delhi,  inter-alia,  to  provide  taxpayer  services,  stakeholder  consultation,  grievance redressal and publicity and public relations. The terms of reference of this Directorate are given in the Annexure.    Further, Taxpayer Service Centres have been set up in all the Commissionerates under the 38 Customs, Central Excise and Service Tax Zones to educate and facilitate the taxpayers across the country.  The primary objective of the Centres is to provide taxpayer services to all taxpayers, including new taxpayers, and not to widen taxpayer base.

- (b) & (c) Yes Madam. There is a steady increase in the tax collected during the last three years and the current year. The details of the same is as under:-

## Direct Tax collection

(Rs in crores)

| Financial Year            |   Total Net Direct Taxes Collection |
|---------------------------|-------------------------------------|
| 2013-14                   |                              638596 |
| 2014-15                   |                              695792 |
| 2015-16                   |                              742295 |
| 2016-17 (up October 2016) |                              377045 |

## Outstanding Taxes

(Rs in crores)

| Financial Year                 |   Total Outstanding Taxes |
|--------------------------------|---------------------------|
| 2013-14                        |                    674916 |
| 2014-15                        |                    827680 |
| 2015-16                        |                    929972 |
| 2016-17 (up to September 2016) |                    903048 |

A  large  part  of  the  outstanding  taxes  are  difficult  to  recover  due  to  various  reasons.    Action  for recovery of outstanding demands is taken in accordance with the provisions of the Income-tax Act, 1961 on continuous basis. There is a detailed plan for recovery of tax arrears.  Strategies and targets to collect the same 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  hierarchical  superior  authorities.  Databases  like  Individual Transaction Statement and 360-degree profile generated by the Department and those maintained by third party agencies like FIU-IND, etc have been made available to the field units for identification of assets  for  recovery.  Guidelines  for  Tax  Recovery  Officers  for  recovery  and  for  dealing  with  stay petitions,  etc  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.

## Indirect Tax collection

(Rs. In crores)

| Financial Year            | Total (Customs, Central Excise & Service Tax)   |
|---------------------------|-------------------------------------------------|
| 2013-14                   | 4,97,060                                        |
| 2014-15                   | 5,44,772                                        |
| 2015-16 (P)               | 7,08,883                                        |
| 2016-17 (April- Sept) (P) | 4,85,850                                        |

(P) -Provisional

The amount of arrears pending for collection as on 30.09.2016 is Rs. 1,97,569 crore. This includes an amount  of  Rs.  1,61,350  crore  locked  up  in  various  legal  fora,  an  amount  of  Rs.  6,633  crore  is restrained  by  authorities,  such  as,  Board  of  Industrial  Finance  and  Reconstruction  (BIFR)  /  Debt Recovery Tribunal (DRT) / Official Liquidator (OL). An amount of Rs. 11,885 crore is pending in those cases where appeal period is not over. The cases involving an amount of Rs. 543 crore are fit for write off, thereby leaving only an amount of Rs. 17,156 crore, which are currently recoverable.

Various steps have been taken to reduce tax arrears and increase recovery.  These steps include filing of early hearing petitions in those cases where substantial amount of arrears has been locked up in various courts / appellate forms, bunching of cases of similar nature for expeditious disposal by the appellate  authorities,  expeditious  action  for  realisation  of  arrears  by  attachment  of  movable  / immovable assets for recovery from sums due in those cases where no stay is granted or where stay granted  has  lapsed,  filing  of  departmental  claims  of  pending  matters  before  Board  for  Industrial Financial  Reconstruction  (BIFR),  Debt  Recovery Tribunals  (DRT) and Official  Liquidators  (OL)  in a timely manner and to pursue them vigorously, sharing details of defaulters with Financial Intelligence Unit  (FIU),  National  Securities  Depository  Limited  (NSDL)  /  Central  Depository  Services  India  Ltd (CDSL) and like authorities to ascertain the information about their income source/ property etc.

## (d):  Direct Tax

Initial outcome of all searches conducted by the Income Tax Department during last 3 years and the current year up to 31.10.2016 is as under:-

| Financial Year               |   Number of groups searched |   Total assets seized ( In Rs. Crore) | Undisclosed income admitted u/s 132 (4) of the Income-tax Act, 1961 [in Rs. Crore]   |
|------------------------------|-----------------------------|---------------------------------------|--------------------------------------------------------------------------------------|
| 2013-14                      |                         569 |                                807.84 | 10791.63                                                                             |
| 2014-15                      |                         545 |                                761.7  | 10288.05                                                                             |
| 2015-16                      |                         445 |                                712.68 | 11066.24                                                                             |
| 2016-17(up to October, 2016) |                         252 |                                554.47 | 7213.11 (Provisional)                                                                |

Out of the above mentioned searches, less than 5% were based upon the information received from informants.  During the last three financial years (F.Y. 2013-14 to 2015-16), rewards amounting to Rs. 2.95  crore  has  been  disbursed  to  informers  from  the  Investigation  Directorate  of  Income  Tax Department.

## Indirect Tax

The  details  of  cases  of  evasion  of  indirect  taxes  reported  by  informers  to  Directorate  General  of Central Excise & Intelligence (DGCEI- upto September, 2016) & DGRI (upto October, 2016) during the last three years and the current year is given in the following table :-

| Year    |   Number of cases based on information given by informers |   Amount recovered from such cases (Rs. in crore) |
|---------|-----------------------------------------------------------|---------------------------------------------------|
| 2013-14 |                                                       446 |                                           9198.66 |
| 2014-15 |                                                       267 |                                          13732.8  |
| 2015-16 |                                                       350 |                                           9892.9  |
| 2016-17 |                                                       301 |                                           3318.92 |

The amount of rewards disbursed to informers during the year 2013-14, 2014-15, and 2015-16 is Rs. 36.05 crore, Rs. 43.93 crore and Rs. 54.97 crore respectively. The amount of reward disbursed in cases relating to DGCEI and DGRI for the current year is Rs. 46.65 crore. The disbursal in a year may relate to cases made during earlier periods also.

- (e) Government has already issues guidelines to protect the identity of informers and their identity is kept secret.
- *****

## Annexure as referred to in reply to part (a) of Unstarred Question No. 640 to be answered in Lok Sabha on 18.11.2016

The terms of reference of the Directorate General of Tax Payer Services, Central Board of Excise & Customs, are as follows:

## Taxpayer Services, Stakeholder Consultation & Grievance Redressal:

- I. Laying  down  service  standards  and  monitoring,  evaluating  &  reviewing  the   same from time to time to  assess  their  effectiveness  and efficiency,
- II. Monitoring  and  reviewing  Citizen's  Charter  and  'Sevottam'  Programme  at  regular  intervals  and suggest improvements. where required.
- III. Conducting customer satisfaction surveys, independent third party audit and impact analysis so as to monitor the quality and efficiency of tax administration,
- IV. Assisting the CBEC in enhancing customer understanding and maximizing voluntary  compliance.
- V. Monitoring  the  functioning  of  PTFCs,  RACs  and  Open  House  Meetings    so  as  to  share  good practices across Zones;
- VI. Monitoring of e-Helplines set up by Customs, Central Excise and Service Tax Zones;

## Monitoring the implementation of directions and awards given by ombudsman to make this initiative more effective

- VII. Monitoring the 'Tax Payer Service Centres' in the Commissionerates and Custom

Houses and analyzing the activities through periodic activity reports sent by the Commissionerates  and  Custom  Houses    and    take    appropriate  steps  for  improvement    in quality  and timely  delivery  of services  and

- VIII. Acting  as  a  'Single  Window  Help  Desk'  for  interface  between  taxpayers  and  field  formations through a dedicated web based service portal In consultation with DGS&DM.

## a. Publicity & Public Relations:

- IX. Providing  taxpayer  information,  taxpayer  education and taxpayer  assistance and designing and executing outreach programmes in coordination with NACEN, DG GST;
- X. Ownership,  Content  Management  &  updating  information  on  CBEC  website  through  content owners;
- XI. Finalising an appropriate channel strategy to ensure that the service delivery is effective and is accessible to all.
- XII. Educating the tax payers as regards their rights and obligations in the matter of tax compliance
- XIII. Compiling  and  issuing  hand-outs,  Guidance  Notes,  brochures,  leaflets  ,  FAQs  etc.  on  various subjects  viz.  baggage  allowance,  refund,  drawback,  rebate,  Project  imports,  SSI  exemptions, CENVAT  scheme,  appellate  remedies  including  alternate  channels  like  AAR  and  Settlement Commission for the benefit of taxpayers.
- XIV. Organising  interactive  sessions  with  trade  and  industry  and  based  on  the  feedback  received suggest changes in tax laws and procedures to the CBEC
- XV. Issuing internal communication aimed at attitudinal refinement of officials from that of regulators to facilitators and service providers.
- XVI. Monitoring  and  executing  the  stakeholder  consultation  process  for  changes  in  policy  and procedures; and

XVII Creating, putting in place and executing an appropriate media policy including social media.