Union finance minister P. Chidambaram said that the tax department’s gaze would soon fall on chronic tax defaulters as it already had “dossiers on economic offenders”.

It would be looking clo­sely at defaulters in sectors such as those who rent immovable property, consultancies, advertising, real estate, transport operators, manpower rec­r­uiters and others.

“Of 17 lakh who registered for payment of service tax only 7 lakh pay that tax. Ten lakh do not pay,” he said at an interactive session on Volu­ntary Compliance Enco­ur­agement Scheme (VC­ES) 2013.

VCES was introduced in May 2013 as a one-time amnesty scheme for paying service tax dues for the period from October 1, 2007 to December 31, 2012, without interest or penalty.

Referring to the scheme as one of the most generous and fair packages offered by the government, the finance minister urged non-filers of service tax returns to use this opportunity to come clean before Dece­mber 31, 2013.

“Non-payment might be out of ignorance or financial pressure. Taxes may have been paid over a pe­riod of time or completely stopped. All that is being washed away by this scheme,” he said. “File your declaration, pay taxes in the current period and you will not be obliged to pay any interest, any penalty or face any prosecution,” Chida­mbaram assured.

Even 15 years after the tax was introduced, a lar­ge number of service providers were not filing their returns despite a huge increase in the number of providers, he pointed out. India had one of the lowest tax to GDP ratio and taxpayer base in the world, the fiance minister lamented.

Praveen Mahajan, chairperson, Central Bo­ard of Excise and Cus­toms, said the Union government was targeting ser­vice tax revenue collection of Rs 180,141 crore in current fiscal up from Rs 132,498 crore last year.