RTI reveals service tax evasion by pharmaceutical companies
The reply to an application under the Right to Information (RTI) Act has revealed that in the past three years, the Central Board of Excise and Customs (CBEC) has issued 66 show-cause notices to drugs manufacturers for evasion of service taxes worth Rs. 207 crore.
The CBEC, however, didn’t provide the copies of the show-cause notices and names of the companies under the RTI reply stating that the information was not available with them. The Comptroller and Auditor General (CAG), in its report on taxes paid by the pharmaceutical companies, had cited instances of tax evasion by them and had recommended measures to curb them. The CAG had cited the absence of mechanism to determine whether manufacturers were providing any output services as the chief cause of service tax evasion.
The annual report of the Director General of Service Tax has pointed that less than Rs. 700 (Rs. 694.06 crore to be exact) Crores out of the Rs. 4,132.68 crore service tax evaded during 2009-10, was has been recovered.