Lok Sabha Question No. 3368 (UNSTARRED), answered on 2017-08-04
Subject: Multi-National Companies
Ministry: FINANCE
Asked by: LALLU SINGH

## Government of India Ministry of Finance Department of Revenue

## LOK SABHA UNSTARRED QUESTIONS NO. 3368

TO BE ANSWERED ON FRIDAY, AUGUST 04, 2017 SHRAVANA 13, 1939 (SAKA)

## MULTI-NATIONAL COMPANIES

3368: SHRI LALLU SINGH:

Will the Minister of Finance be pleased to state:

- (a) whether Multi-National Companies (MNCs) are evading taxes by taking benefit of loopholes in the existing laws;
- (b) if so, the reaction of the Government thereto;
- (c) whether  the  Government  has  assessed  the  financial  loss  suffered  by  the country due to tax evasion on account of the aforesaid reasons; and
- (d) if so, the amount of tax evaded by such companies during the last three years and current year?

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

(a) & (b):

## Direct Tax

Appropriate action against tax evasion, including by Multinational Companies (MNCs),  is  an  on-going  process.  Such  appropriate  action  under  direct  tax  laws includes searches, surveys, assessment of income, levy of tax, penalty and filing of prosecution complaints before criminal courts, wherever applicable.

## Indirect Tax

Modus  Operandi  circulars  are issued,  from time  to  time,  regarding  evasion  of Central Excise, Customs Duty & Service Tax to field formations, whenever any new Modus Operandi comes to the notice of the Government. Besides, regular steps are taken  to  improve  anti-evasion and  anti-smuggling  performance.  Third  party information is also utilized to detect evasion of tax.

(c) & (d):

No separate data regarding direct tax and indirect tax evasion by Multi-National Companies  in  the  country  is  maintained.  However,  the  undisclosed  income admitted during search & seizures action by  Income  Tax  Department  and  the  details  of  Indirect  tax  evasion  detected  by CBEC during the last three years and the current year are as under:

## Direct Tax

The undisclosed income admitted during search & seizures.

[Rs. in crore]

| Financial Year             |   Number of groups searched |   Total assets seized |   Undisclosed income admitted u/s. 132(4) of the Income-tax Act, 1961 |
|----------------------------|-----------------------------|-----------------------|-----------------------------------------------------------------------|
| 2014-15                    |                         545 |                761.7  |                                                              10288    |
| 2015-16                    |                         447 |                712.68 |                                                              11226.2  |
| 2016-17                    |                        1152 |               1469.45 |                                                              15660.9  |
| *2017-18 (upto June, 2017) |                         102 |                103.02 |                                                               2677.63 |

*Figures are provisional

The details of Surveys undertaken.

## (Rs. in crore)

| Financial Year           |   No. of surveys conducted |   Undisclosed detected. | income   |
|--------------------------|----------------------------|-------------------------|----------|
| 2014-15                  |                       5035 |                12820.3  |          |
| 2015-16                  |                       4428 |                 9699.85 |          |
| 2016-17                  |                      12526 |                13715.9  |          |
| 2017-18 (upto May, 2017) |                        202 |                  150.27 |          |

After the search/survey or other modes of investigation/enquiries, total income of a taxpayer including undisclosed income is determined through a quasi-judicial process of assessment. Such assessments are subject to appeals provided under the law.

## Indirect Tax

CUSTOMS DUTY                                                                                            (Rs. in crore)

| Year   | Outright Smuggling Cases (Value of goods seized)   | Commercial Fraud cases detected (Duty evasion detected)   | Duty Recovered   |
|--------|----------------------------------------------------|-----------------------------------------------------------|------------------|

|         |   No. of cases |   Value of goods seized |   No. of cases |   Duty evasion detected |         |
|---------|----------------|-------------------------|----------------|-------------------------|---------|
| 2014-15 |          20218 |                 1793.42 |           1926 |                 4470.34 | 1188.87 |
| 2015-16 |          38259 |                 2048.23 |           3198 |                 3609.84 | 1198.65 |
| 2016-17 |          40146 |                 3527.02 |           2501 |                 1835.09 | 1393.86 |
| 2017-18 |           8652 |                  645.41 |            671 |                  476.92 |  422.93 |

CENTRAL EXCISE                                                                                    (Rs. in crore)

| Year        | Detection    | Detection   | Recovery     | Recovery   |
|-------------|--------------|-------------|--------------|------------|
|             | No. of Cases | Amount      | No. of cases | Amount     |
| 2014-15     | 2138         | 4331.5      | 1594         | 539.53     |
| 2015-16     | 2366         | 5296.8      | 1642         | 803.78     |
| 2016-17     | 2122         | 5772.95     | 1480         | 794.66     |
| 2017-18     | 300          | 3553.03     | 239          | 129.35     |
| (upto June) |              |             |              |            |

SERVICE TAX                                                                                  (Rs. in crore)

| Year                | Detection    | Detection   | Recovery     | Recovery   |
|---------------------|--------------|-------------|--------------|------------|
|                     | No. of cases | Amount      | No. of cases | Amount     |
| 2014-15             | 6454         | 9840.51     | 8585         | 4552.35    |
| 2015-16             | 5691         | 16227.65    | 6661         | 3086.07    |
| 2016-17             | 8085         | 17845.66    | 9616         | 5313.29    |
| 2017-18 (upto June) | 1421         | 3275.13     | 1536         | 688.18     |

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