NEW DELHI : The Central Board of Excise and Customs increased the monetary threshold for arrest and prosecution for evasion of excise duty, custom duty, service tax, and mis-declaration of baggage.
The threshold for cases of offence of evasion of tax or wrongful utilization of input tax credit in case of central excise and service tax has been raised to 10 mln rupees each.
The earlier floor for excise duty was 2.5 mln rupees and for service tax was 1 mln.
Presently, overseas travellers can pay a fine for any undeclared or misdeclared baggage of a value up to Rs 5 lakh. Any such baggage beyond this limit attracts prosecution or arrest. The government has now raised this limit to Rs 20 lakh.
“The monetary limits for arrest and prosecution have been revised substantially upwards to ensure that these (taxation) powers are not used against small and medium businesses,” the finance ministry said.
For evasion of tax under the Customs Act, the lower limit has been raised ten times to 10 mln rupees.
In cases of outright smuggling or mis-declaration of baggage, the limits regarding value of offending goods have been revised from 500,000 rupees to 2 mln rupees. “As in the past, there shall be no lower limit for arrest and prosecution in the cases of smuggling of fake Indian currency notes, arms, ammunitions and explosives and endangered species,” the ministry said.
“As in the past, there shall be no lower limit for arrest and prosecution in the cases of smuggling of fake Indian currency notes, arms, ammunitions and explosives and endangered species,” it said.
A company/assessee would be treated as habitually evading tax/duty, if it has has been involved in three or more cases of confirmed demand of excise duty or service tax or misuse of Cenvat credit involving fraud, suppression of facts etc in past five years such that the total duty or tax evaded or total credit misused is equal to or more than Rs 1 crore, the notification said.
