- Service tax revenue has increased year-on-year from 2009-10 to 2011-12, reaching Rs. 97,356 crores in 2011-12. Top services contributing to collection include telecommunications, banking, insurance, and renting of immovable property. - Anti-evasion efforts have increased detection of unpaid taxes significantly from 2011-12 to 2012-13. Audit performance has also increased tax detection but realized amounts have decreased in the current year. - Adjudication of service tax cases is highly pending, with over 27,000 cases involving Rs. 32,145 crores pending at the Commissioner level. Refunds and return scrutiny also face significant pendency. - Administrative constraints

1. Central Board of
Excise & Customs
Revenue Performance,
Expectations and
Constraints
CC Conf. Service Tax Presentation 1
A Presentation on
Service Tax

2.  Revenue Performance
 Audit & Enforcement Achievements
 Areas of Concern and Action Plan :- Stop
Filers, Adjudication, Arrears, Defaulters &
Scrutiny of Returns
 Constraints and remedial measures
Presentation Schema
2

3. 3
Service Tax Revenue
Year Target Actual
Collection
Increase/Decrea
se over previous
period
Percentage
Increase /
Decrease over
previous period
2009-10 58000 58319 -2383 -4
2010-11 69400 71191 12872 22
2011-12 95000 97356 26165 37
Up to July'11 27212
2012-13
(Upto July'12)
124000 38070 10858 40
[in Crores ]

4. 4
Top 10 Services (Amount in Crores)
Sr
No
Service Revenue
2011-12
Up to
July'11
Up to
July'12
Percentage
Increase
1 Telecommunication 5098 1300 2047 57
2 Banking & other 5263 1374 1619 18
3 Business Auxiliary Service 5071 1326 1699 28
4 Insurance 4461 1271 1935 52
5 Business Support Service 4176 843 1319 56
6 Renting of Immovable Property 4134 936 1490 59
7 Works Contract 3674 919 1219 33
8 Manpower Recruitment Agency 3433 884 1287 46
9 Maintenance & Repair 3104 786 1049 33
10 Transport of Goods by Road 3157 834 1115 34
TOTAL 41571 10473 14779 41
Top 10 Services contribute 43% of the total ST collection

5. 5
Anti Evasion Performance
(Commissionerates & DGCEI)
Period No of cases Amount
detected
Amount
Realised
2010-11 4172 8244 953
2011-12 4394 10435 1773
2011-12 ( Upto June'11) 806 2997 222
2012-13 ( Upto June‘12) 1427 4185 563
% growth in current
year
(+) 77 % (+) 40 % (+) 153 %
[ Amt. in Crores ]
i) Commissionerate performance - DGST MTR compilation
ii) DGCEI for their performance

6. 6
Audit Performance
Period No of units
Audited
Amount
Detected
Amount
Realised
2010-11 12979 7389 1155
2011-12 11724 6972 1326
2011-12 (Up to June'11) 2659 2242 260
2012-13 (Up to June'12) 2489 1227 347
% growth in current year (-)6 (-)45 (+) 33
[ Amt. in Crores ]

7. Service Tax Important Facts
Total number of registered assessees 16.17 lakhs
Total number of active assessees 6.5 lakhs
New registrants 2010-11 1.67 lakhs
New registrants 2011-12 1.99 lakhs
New reg. filed from April to July'12 90539
Exclusive Service Tax Commt’s 7
Revenue contributed by 7 Commt’s
[66,358 Crores]
68%
% of All India Active Assesses in 7
Commt’s
45 %
Asssessees paying > 1 Crore revenue 9265
7CC Conf. Service Tax Presentation

8. STOP FILERS
• Reasons for gap between Registered &
Active Assessees
• Exemption threshold, Taking of
Centralized Registration, Registration for
non Service Tax purposes, Defaulters /
Evaders.
• Enquires initiated but in large number of
cases, assessees not found / not responding.
• Considering huge number of stop filers and
meager staff for Service Tax, it is not feasible
to verify all cases
• PAC Also took up this issue.
8CC Conf. Service Tax Presentation

9. Stop Filers : Action Plan
•Obtaining Income Tax Return
information to find out turnover for
firms / companies filing ITR
•Getting information from Income
Tax offices at local level is very
difficult. Hence, Systems
Directorate of CBDT may be
directed to provide required
information.
9CC Conf. Service Tax Presentation

10. Adjudication Pendency
10
Adjudication
Authority
0 to 3
months
3 to 6
months
6 to 12
months
> 1
year
No Amount No No No No
Commissioner 5179 45793 1353 502 1692 1632
Additional / Joint
Commissioner
6310 1178 1997 883 2258 1172
Deputy / Assistant
Commissioner
10928 271 4756 1706 2485 1981
Superintendent 1444 112 460 403 203 378
CC Conf. Service Tax Presentation
Adjudication pending with 7 Service Tax Commissioners.
2726 cases amounting to Rs 32145 Crores.
During 2011-12, the 7 Service Tax Commissionerates issued
2053 SCNS answerable to Commissioner
[in Crores ]

11. Steps to Reduce intake of SCN’s-1
• On payment of Service Tax & Interest
No SCN, except in case of intentional
evasion – instructions to be issued or
amended in Section 73.
• Even if an appeal filed against Tribunal
order by one office, other can follow
that order, subject to appeal at the level
of CC-instructions may be issued.
11CC Conf. Service Tax Presentation

12. Steps to Reduce intake of SCN’s-2
•Section 73(5) provides for payment
of penalty of 1 % Tax per month to
settle a case. Proposal to increase
rate of interest from 1.5% to 2.5%
•For revenue neutral transaction
(person liable to pay is also entitled
for Cenvat Credit), cases to be
closed on payment of Service Tax
& Interest.
12CC Conf. Service Tax Presentation

13. Steps to expedite Adjudication of Pending SCNs
• 96% amount locked up at Commissioner’s level
• Annual intake of > 2000 cases in 7 Service Tax
Commissionerates.
• Commissioner (Adj) posted at Mumbai & Delhi.
• Divert 6 Commissioner (Appeals) for Service Tax work.
• Proposed to post extra Commissioners - Mumbai-I (2),
Mumbai-II (1), Delhi (2), Chennai (1).
• New Commissioners also to look after other work like review,
legal etc. to spare regular Commissioner for revenue
mobilization tasks.
• Increase monetary limit of power of adjudication at JC / ADC
level from Rs. 50 Lakh to 1 Crore.
CC Conf. Service Tax Presentation 13

14. Areas of Concern
[ Amt. in Crores ]
14CC Conf. Service Tax Presentation
Pendency 0 to 3
months
3 to 6
months
6 to 12
months
> 1
year
No Amount No No No No
Refunds 9279 3496 4345 1378 1356 2200
Return
Scrutiny
885304 536266 232803 99595 16640
No of
cases
Amount
involved
Restrained (non recoverable)
arrears (stayed, appeal
pending, BIFR, etc)
Recoverable
Arrears
No Amount No Amount
56250 24388 26183 21870 30067 2518
Arrears Position

15. Arrears - 1
• For cases pending in appeals, a scheme may
be introduced to pay disputed tax and higher
rate of interest say 2% per month, to settle a
case.
• Alternatively, scope of Settlement
Commission may be enlarged to cover cases
pending before Commissioner (A), Tribunal &
Courts for a period of one year.
• For cases pending in appeal where Cenvat
credit is available to noticee himself, cases
may be settled on payment of Service Tax &
interest.
15CC Conf. Service Tax Presentation

16. Arrears - 2
• Large number of cases of arrears involving small
amount upto Rs. 5000, mostly penalty for non filing
of returns
• Write off provision of Service Tax to be introduced.
• For writing off smaller amount say upto Rs. 10,000/-
per case, a simplified procedure to be introduced.
• Project to create a combined online data base of all
arrears of Excise / Customs / Service Tax is under
implementation. Before granting refund / drawback,
status of arrears would be verified.
16CC Conf. Service Tax Presentation

17. Defaulters -1
• Tax collected but not paid -
Important cases of Airlines and
Security companies.
• No direct mechanism available to
detect defaulters but tax payers not
paying at all or paying substantially
less can be identified.
• Local level data analysis resulted in
recovery of Rs. _____ Crores in last
one year.
17CC Conf. Service Tax Presentation

18. Defaulters - 2
• For all India basis monthly MIS is
proposed to be issued by DG
(systems)
• Deterrent action like non utilization
of CENVAT credit, if tax not paid
within 30 days, like in Central
Excise (rule 8(3A))
• Additional Staff
18CC Conf. Service Tax Presentation

19. Negative List
• Aim is to expand tax base,
minimize taxability / classification
disputes and to move towards GST
• Expected revenue increase 10%
• No classification of service – sector
wise revenue analysis not feasible.
Hence, it is proposed to obtain
information for 20 important
service sectors in the returns.
19CC Conf. Service Tax Presentation

20. Assessee Base & Revenue visa-a-vis
Staffing Position in Service Tax
Commissionerates
[ Amt. in Crores ]
20
Commt’e No. of
regd.
assessees
Revenue
collection
2011-12
Addl. / Jt
Commr.
Dy. /
Asstt.
Commr.
Supdt. Insp.
MUMBAI-I 91079 23181 2 10 164 203
DELHI 203575 20193 4 10 150 178
MUMBAI-II 125746 8352 2 8 87 126
BANGALORE 106737 5034 2 8 86 100
CHENNAI 77291 4412 2 7 111 141
KOLKATTA 51076 3395 1 9 106 126
AHMEDABAD 35582 1791 2 6 85 73
CC Conf. Service Tax Presentation

21. Revenue Augmentation
• Action against defaulters and stop filers
• Speedy Adjudication
• Identification of evaders and new assessees
• Third party information.
i) DGS data of Income Tax for service providers
like Renting, Commission, Work Contract,
ii) Data of State Excise Authorities to identify
Restaurants liable to pay Service Tax.
iii) Foreign Exchange Payment from AD.
21CC Conf. Service Tax Presentation

22. Administrative Constraints
• Insufficient staff specially in the Service
Tax Commissionerates.
• Huge pendency of adjudication at
Commissioner level.
• One assessing group having about 1500 -
2000 active assessees (about 3000
registered assessees).
• Because of insufficient staff – audit of
mandatory units not covered.
• Training of staff.
22CC Conf. Service Tax Presentation