March 2:The Finance Ministry has proposed 100 per cent increase, to Rs two crore, in the monetary limit for arresting Service Tax evaders, a step aimed at projecting its taxpayer-friendly image.
At present the limit to arrest such evaders is Rs one crore.
Finance Minister Arun Jaitley has proposed to bring in this change through Finance Bill 2016 introduced in Parliament on Monday.
The power to arrest in Service Tax law is proposed to be restricted only to situations where the tax payer has collected the tax but not deposited it with the exchequer, and amount of such tax collected but not paid is above the threshold of Rs 2 crore, as per the new proposal which will come into force after passing of the Bill in Parliament.
The monetary limit for filing complaints for punishable offences is proposed to be enhanced to Rs 2 crore, it said.
The power to arrest a Service Tax evader was first given in 2013 before which revenue authorities had no power to arrest such persons for non-payment of collected Service Tax.
The Finance Ministry had then for the first time amended Service Tax rules to attract the Criminal Procedure Code in line with Customs and Central Excise regulations.
In the case of the offence, where the amount exceeds Rs 50 lakh, a defaulter will get imprisonment for a term which may extend to seven years, as per the Finance Act 2013.
The monetary limit was last year increased to Rs one crore and now it has been proposed to be Rs two crore