Corruption in Excise Dept - Addl Inputs

Below are the key issues, root causes and solutions for addressing corruption in excise department. Kindly review and share additional inputs on any other specific solutions that can be implemented to address the same.

We look forward to your inputs!
Transparency International India

Corruption in Excise Dept - Solutions

1. The process of VAT collection should be automated and made online
2. Excise department should be made a paperless department
3. The central excise law should be amended according to the existing market/business conditions
4. The ambiguity in the central excise law should be removed
5. A helpline should be created where the cases of excise inspectors asking for a bribe could be reported
6. The authority of the excise inspectors should be curtailed
7. A committee should be set up to find the corrupt officers and take strict action against them
8. The assets and bank balance of the excise inspectors should be monitored and substantial changes should be tracked
9. All the notices from excise department to the traders should also be linked with online and send on their respective email and/or sms
10. Circles should be created on excise so community can help each other as well as report issues
11. The trader’s associations themselves should take a stand against excise corruption
12. An example should be made out of the inspectors caught in corruption cases.

Corruption in Excise Dept - Root Causes

1. Excise inspectors have a lot of authority and discretionary powers
2. They misuse this authority and take bribes
3. Excises processes have a lot of loop holes
4. Excise enquiry opens the doors to many other enquiries such as from the Enforcement Directorate, Income Tax Department etc. Hence, people don’t mind paying bribes to excise inspectors
5. Traders make a lot of money by evading excise and therefore do not mind paying off the excise inspectors
6. Excise inspectors are happy to pay for transfers/promotions to bug business areas where they can make more money
7. Bribes are paid in form of kind so that it goes undetected
8. The excise laws have been made in such a manner that there is room for bribery
9. There is no easy/convenient way to report corruption in excise
10. Action against the corrupt is taken only in the rarest of the rare cases
11. Excise department still works with a lot of files and papers which adds fuel to cases of corruption.

Corruption in Excise Dept - Key Issues

1. There is an inspector raj in the excise department
2. Any job done in the local VAT office attracts a bribe
3. The central excise tax law is ambiguous and creates scope for corruption
4. Shopkeepers are harassed by excise officers
5. Traders are forced to pay bribes worth lakhs to let go of fines
6. Some factory owners bribe the inspectors to keep their eyes closed
7. The posts in excise department are auctioned and the rates are fixed depending upon the scope of making money
8. Excise inspectors make frequent visits to big businesses and ask for bribes in form of cash and kind. more