'Rs 40,000 cr service tax collections in FY07'

New Delhi, Jul 20: The Finance Ministry would garner Rs 40,000 crore through the imposition of service tax in the current fiscal, against the targeted amount of Rs 35,000 crore, according to Central Board of Excise and Customs (CBEC) Chairman V P Singh.

''Towards the end of the current fiscal, the revenue collections would touch Rs 40,000 crore as the Finance Ministry has widened and broadbased the service tax net which contributes more than 54 per cent to the national GDP,'' Mr Singh said.

The chairman admitted there are many issues of conflicts pertaining to the service tax between the industry and Finance Ministry, and since the government is open to correction, the pending issues would shortly be resolved to provide the service tax payers a relief.

Mr Singh also said Large Tax Payers Units (LTPU) would start functioning from October 1, 2006, first with the cyber city of Bangalore, and from January 1, 2007, in Chennai and a little later in Kolkata.

The LTPUs would commence operations in these above metropolies under direct monitoring from CBEC, Mr Singh said and added that these LTPUs would become effectively operational in Delhi and Mumbai from mid 2007 under the supervision of Central Board of Direct Taxes (CBDT).

Mr Singh said the LTPUs should have come into being much earlier but due to various reasons, the schedule for LTPUs could not be made effective by the government. However, now there will not be any delay and the corporates would greatly benefit with these centres for tax collections becoming operational.

The CBEC chairman also announced that the Finance Ministry has identified 22 Post Offices in the capital from which the service tax payers can collect applications and have them deposited there only as per the schedule given for service tax deposits.

This will help the tax payers to escape bureaucratic hurdles and even harassment, from the lower bureaucracy in other places, as Post Offices are perhaps the best models for deposit of service tax.

Chief Commissioner of Central Excise Delhi S C Mathur blamed the service tax payers for evading payment, as 50 per cent of those that fall in the service tax net, have been escaping their service taxes dues.

The government has not been able to monitor their movements as they move their addresses so frequently that it becomes difficult for the field officers to chase them, said Mr Mathur urging the taxpayers to regularly pay their dues to escape them actions from the authorities.

He said that their might be some issues and ambiguity in the rules books for service taxes but these can always be resolved, provided industry and government keep interacting regularly.

Among the other senior government officials who spoke on the conference on 'Service Tax: The Changing Dimensions' organised by industry chamber Assocham, Central Excise Commissioner Ludhiana, V K Garg, CBEC (TRU) Joint Secretary R Sekar and Dy Secretary (TRU) R Sriram, Department of Revenue, Ministry of Finance.

UNI