Chidambaram says no escape route for service tax evaders

Finance Minister P Chidambaram today said service tax evaders would not get any escape route and warned that stern action, including arrest and prosecution, would be taken against them.
"The services sector constituted 55 per cent of the GDP of the country. There is no reason why this sector will not be taxed. So services must be taxed," Chidambaram said at an awareness camp here on Voluntary Compliance Encouragement Scheme (VCES), an amnesty package offered by the government for defaulters.
Stating that there are 17 lakh service tax registrants, he said, "This is a healthy number. But only 7 lakh out of them pay service tax. The rest have forgotten. Some of them are either no-filers or stop-filers."

There was a need to reach out to the remaining 10 lakh, he said.
"Some may think that they can get away. But with the help of technological resources, any tax evader can be under the scrutiny of any revenue department and a 360-degree profile can be easily churned out," he said.
"In fact, we have such profiles. We have dossiers on them. The government will have the option to arrest and prosecute chronic offenders," he said, adding that so far 13 arrests had been made in the country.
Sectors that collected service tax and did not deposit them with the government were construction, couriers, telecom and security services, among others, he said.

Chidambaram urged traders and others to take advantage of the VCES scheme and come out clean.