Collection as a ratio of arrears during 2014-15 has fallen drastically to 1.17 per cent compared to 10.46 per cent in the previous fiscal, public auditor CAG has said in a report tabled in Parliament.
“Although, falling ratio of collection of arrears have been repeatedly pointed out by audit, there is no sign of improvement. There is a need to strengthen the recovery mechanism of the department,” said the CAG Compliance Audit Report on ‘Indirect Taxes - Service Tax’. The Service Tax collection was Rs 1,67,969 crore during 2014-15 and accounted for 30.75 per cent of indirect tax revenue.
Indirect tax collection as a ratio of GDP has decreased in 2014-15 compared to the previous fiscal, while as a ratio of gross tax revenue, it has increased, the report said. Service Tax revenue as a percentage of GDP has been increasing every year during last four years, though it declined marginally during the fiscal ending March 2015.