Fin Min to mail 'polite letters' to service tax defaulters

Service tax, customs and excise duty defaulters will get "polite letters" seeking information about their pending liability and any suspicious dealings carried out by them possibly with black money.
The novel method of non-intrusive letters will be sent to seek clarifications from an entity or an individual who has carried out a financial transaction, red flagged by economic intelligence agencies as black money or seen as an attempt to dodge authorities from paying taxes, Finance Ministry officials said.
It will be for the first time that such polite letters will be issued to indirect tax defaulters. Earlier, only the Income Tax department issued such letters to tax dodgers, they said.

The Directorate General of Central Excise Intelligence (DGCEI) and Directorate General of Revenue Intelligence (DGRI)--two lead intelligence agencies under the Finance Ministry--have been made the nodal authorities for the purpose.
While the DGCEI will send the letters to service tax and excise duty defaulters, the DGRI will send them to customs duty evaders, the officials said.
Both the DGCEI and DGRI will also coordinate with Financial Intelligence Unit (FIU), an agency tasked with analysing and disseminating information relating to dubious transactions, to check flow of black money through service customs and excise duty evasions.
Based on the inputs from the FIU, these agencies will also write to respective entity to seek details on suspicious transactions carried out by them.

The officials said a person or company on receipt of such letters can attach relevant documents as proof against a suspected transaction, earmarked by FIU or other intelligence agencies, while writing back to the authorities.