Due to economic slowdown, central excise and service tax department has fallen short almost Rs 2,000 crore from its targets in duty and tax collection in the current year in the Ahmedabad zone.

The service tax department had collected Rs 3,941.24 crore till January 2014, against the target of Rs 4,975.97 crore. First time in the last three years, service tax collections are lagging behind by such margin from the target.

Similarly, against the set target of Rs 7,424.11 crore in excise duty, the department was able to collect only Rs 6,558.94 crore in the current fiscal till January 2014. Except for 2011-12, excise collections have always surpassed the target in the past. The Ahmedabad zone covers entire north, central and Saurashtra region of Gujarat.

With the economy in a bad shape, the imports have gone down and the revenue from services that come under tax net too declined. "The service tax collections from the sectors like ports and construction services have fallen sharply," said a senior central excise official. The zone has collected revenue of Rs 6,559 crore in excise duty and Rs 3,941 crore in service tax during the current fiscal year. The target kept by the department for the zone in excise duty is Rs 9,400 crore and Rs 6,386 crore in service tax for the whole financial year.

"This year it has been challenging as far as recovery is concerned. We hope that we will meet the target in excise duty collections when the year ends, but in case of service tax it is difficult," said the official.

Since May 2013, the central excise officials have been taking action against defaulters and even arrested them. "We made seven arrests in the city including arrest of builder Umang Thakker since last year," added the official. In May 2013, Union finance ministry amended provisions which allow central excise and service tax department to make arrest under Section 103 (K) of the Finance Act 2013.

"The honest tax payers are being felicitated and unscrupulous elements are dealt with full force of law," said R K Singh, chief commissioner, central excise and service tax, Ahmedabad zone.