CBIC analysis of ITR/TDS data received from CBDT shows possible leakage of Service Tax revenue

CBIC analysis of ITR/TDS data received from CBDT shows possible leakage of Service Tax revenue

As per Central Board of Indirect Taxes & Customs (CBIC), DG (Systems) has undertaken an analysis of the Income Tax Returns (ITR)/Tax deducted at Source (TDS) data for FY 2015-16 received from the CBDT with a view to identify possible leakage of Service Tax revenue and the results were intimated to DGGI and field formations for further follow up action.

Similar exercise has been completed for the ITR/TDS data for FY 2016-17. 

As per the analysis it was seen that there is a considerable gap between the turnover on account of services as per the ITR/TDS data and the value of services declared in the corresponding Service Tax returns (above threshold of Rs. 1o lakhs).

For FY 2015-16 alone, the mismatch is to the tune of of approx. Rs. 12 Lakh Crores.

The reasons for the mismatch are  Permanent Account Numbers (PANs) that are either not at all registered in Service Tax or PAN’s that are so registered but have not filed the Service Tax returns. Also there is mismatch between the turnover declared in the ITR/TDS and the Service Tax returns which can be attributed to a number of valid reasons such as exempted or exported services not being declared in the Service Tax returns, missing Service Tax returns, RCM, services outside the scope of service tax etc.

The CBIC has advised all field units to not to ignore high magnitude of the mismatch as it could indicate the possibility of revenue leakage which cannot be ignored.