Lok Sabha Question No. 2139 (UNSTARRED), answered on 2016-05-06
Subject: Tax Collection
Ministry: FINANCE
Asked by: A. ARUNMOZHITHEVAN, VEENA DEVI, KAMLA DEVI PATLE, OM BIRLA

## Government of India Ministry of Finance Department of Revenue

## LOK SABHA

## UN-STARRED QUESTIONS NO. 2139

TO BE ANSWERED ON Friday, May 6, 2016 Vaisakha 16, 1938 (Saka)

## TAX COLLECTION

2139. SHRI A. ARUNMOZHITHEVAN: SHRIMATI VEENA DEVI: SHRIMATI KAMLA DEVI PAATLE: SHRI OM BIRLA:

Will the Minister of FINANCE be pleased to state:

- (a) the details of estimate and collection actually made of direct and indirect taxes, head-wise during each of the last three financial years;
- (b) the date-wise, name-wise details of the taxes, duties, surcharges levied and recovered during the last year along with the goods on which these taxes have been imposed; and
- (c) the various steps taken or proposed to be taken to improve the tax collection and boost the economy of the country?

## ANSWER MINISTER OF STATE IN THE MININSTRY OF FINANCE (JAYANT SINHA)

- (a)  The details of estimate and collection actually made of direct and indirect taxes during the last three years head-wise is at annexure.
- (b)      Swachh  Bharat  Cess  (SBC)  was  levied  with  effect  from  15 th November, 2015 on all taxable  services  except  those  are  in  the  negative  list  or  exempted  otherwise.  The  total collection  under  Swachh  Bharat  Cess  in  Financial  Year  2015-16  is  Rs.  3901.78  crore (provisional).    Infrastructure  Cess  was  imposed  in  the  Union  Budget  2016-17  on  motor vehicles falling  under heading 8703 of the First Schedule of the Central Excise Tariff Act, 1985.  The  infrastructure  cess  has  been  made  effective  from  1 st March,  2016.  The  total collection under Infrastructure Cess during March, 2016 is Rs. 288 crore (provisional).
- (c  )        For  improving  the  Direct  and  Indirect  tax  collection,  following  measures  have  been taken:-

## Direct Tax

-  Monitoring of advance payments by top taxpayers;
-  Recovery of outstanding taxes;
-  Monitoring payment of tax deducted at source by top deductors;
-  Organizing awareness programmes regarding TDS/TCS provisions for proper compliance;
-  Utilizing  third  party  information  available  through  Annual  Information  Report  (AIR), Central  Information  Bureau  (CIB)  and  other  agencies  for  detection  of  cases  of  tax evasion and new tax-payers;
-  Early disposal of high demand assessments and appeals for early recovery of demand;

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-  Multi-media campaign to encourage voluntary compliance of tax laws;
-  Monitoring of payment of Dividend Distribution Tax and Regular Assessment tax etc;
-  Search and seizure in suitable cases to deter tax evasion.

Steps have been initiated to reduce tax related litigations and disincentivised framing of high pitched assessments, which will result in  reduction of demands stuck in litigation.  Also, guidelines for grant of reward to informant for providing information leading to recovery of tax dues have been recently framed.   Efforts are continuously underway to make filing of all types  of  returns,  statements,  applications,  etc  under  the  Income  Tax  Act  and  their processing  online,  leading  to  an  increasingly  efficient,  informed  and  taxpayer  friendly  tax administration.  These measures in turn are encouraging more voluntary compliance with tax laws leading to improvement in tax collection.

## Indirect Tax

A  numbers  of  steps  have  been  taken  to  increase  the  indirect  tax    collections,  for instance,  widening the tax base by comprehensive taxation of all services (introduction of Negative  List  approach  to  taxation  of  services  w.e.f  1 st July  2012)  and  reduction  of exemptions in Central Excise, Customs and Service Tax wherever possible. The Negative List has been further pruned in successive budgets and exemptions have been rationalized. Similarly  on  the  Central  Excise  side  exemptions  are  reviewed  continuously  and  where feasible these have been rationalized.

Besides, other measures taken to improve the compliance levels are mandatory efiling of returns and e-payment of taxes, high interest rates for delayed payment, extensive use of third party sources such as State VAT department, Income Tax etc. for compliance verification, taxpayer education and media campaign.

Measures taken by the Government in the Budget, 2016-17 to improve indirect tax collection are mentioned below:

## Customs & Central Excise :

-  Clean Energy Cess [now called Clean Environment Cess] levied on coal, lignite and peat has been increased from Rs.200 per tonne to Rs.400 per tonne.
-  An Infrastructure Cess @ 1%, 2.5% and 4% has been imposed on certain specified motor vehicles.
-  Excise duty on Aerated waters, lemonade and other waters, containing added sugar or other sweetening matter or flavoured has been increased from 18% to 21%.
-  Additional Excise Duty on cigarettes has been increased on non-filter and filter cigarettes of various lengths so that the aggregate of duties of excise on such cigarettes increases by about 10%.
-  Specific  rates  of  Excise  duty  on  Cigar  and  cheroots,  Cigarillos,  Cigarettes  of  tobacco substitutes, Cigarillos of tobacco substitutes and other forms of tobacco substitutes has been increased by about 10%.
-  Excise  duty  on  Gutkha,  chewing  tobacco  (including  filter  khaini)  and  jarda  scented tobacco has been increased from 70% to 81%, Excise duty on unmanufactured tobacco has  been  increased  from  55%  to  64%.  Further,  excise  duty  on  pan  masala  has  been increased from 16% to 19%. Accordingly, duty payable per machine per month for each of these tobacco products has also been revised upwards.
-  Excise  duty  on  Aviation  turbine  fuel  [ATF],  other  than  for  supply  to  aircraft  under  the Regional Connectivity Scheme, has been increased from 8% to 14%.
-  Excise duty of 2% (without CENVAT credit) and 12.5% (with CENVAT credit) has been imposed on branded readymade garments and made up articles of textiles of retail sale price of Rs.1000 or more. Also, tariff value of these goods has been increased from 30% of the retail sale price to 60% of the retail sale price.
-  Excise duty of 1% (without CENVAT credit) and 12.5% (with CENVAT credit) has been imposed  on  Articles  of  Jewellery  [excluding  silver  jewellery,  other  than  studded  with diamonds/other precious stones].
-  Basic Customs Duty on Cashew nuts in shell has been increased from Nil to 5%.

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## Service Tax

-  An enabling provision has been incorporated in the Finance Bill, 2016 to empower the Central Government to impose a Krishi Kalyan Cess on any or all the taxable services at a rate of 0.5% on the value of such taxable services. The proposed levy will come into force with effect from 1 st June 2016.
-  The Negative List entry covering 'service of transportation of passengers, with or without accompanied  belongings,  by  a  stage  carriage'  has  been  omitted  [section  66D  (o)  (i)]. Consequently,  service  tax  would  be  leviable  on  transportation  of  passengers,  with  or without accompanied belongings, by air-conditioned stage carriage.
-  Finance Act, 1994 was amended vide Finance Act, 2015 so as to make any service (and not only support services)  provided by Government or local authority to business entities taxable from a date to be notified later. 1st April, 2016 has been notified as the date, from which any service provided by Government or local authority to business entities shall be taxable.
-  Assignment  by  the  Government  of  the  right  to  use  the  radio-frequency  spectrum  and subsequent transfers thereof has been proposed to be declared as a service under the Finance Act 1994.
-  Exemption is being withdrawn in respect of the following services,-
- (i)  Services provided by  a senior advocate to another advocate or to a law firm;
- (ii)  Services provided by a person represented on an arbitral tribunal to an arbitral tribunal.
- (ii)  Exemption  to  the  services  of  transport  of  passengers,  by  ropeway,  cable  car  or  aerial tramway is being withdrawn.
- (iii)  Exemption  to  construction,  erection  etc.,  of  monorail  or  metro  is  being  withdrawn,  in respect of contracts entered into on or after 1 st March 2016.
-  Abatement on shifting of used household goods by a Goods Transport Agency has been rationalized at the rate of 60%.

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