The government today said it has served show cause notices to manufacturers of pharmaceutical products who have failed to pay service taxes worth hundreds of crores of rupees.

“Show cause notices have been issued to such manufacturers (of pharmaceutical products) for recovery of service tax invoking deterrent penalties and interest,” Minister of State for Chemicals and Fertilisers, Srikant Kumar Jena informed the Rajya Sabha.

To a query on whether the government has noticed several cases where manufacturers of pharmaceutical products did not pay service tax worth hundreds of crores of rupees, Jena said, “Yes”.

As per information provided by the Finance Ministry, necessary action to safeguard the government revenue has been taken as per the provision of Finance Act and Service Tax Rule, the Minister said.

According to Jena, more focus is given towards collection of intelligence, intensive audits and anti-evasion checks to prevent evasion of tax.

“Resources have also been taken to educate the tax payers to increase level of compliance. The audit wing has been directed to thoroughly verify the records of pharmaceutical companies during their visit so as to detect evasion if any, by the concerned companies,” Jena said.

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