Number of sales tax defaulters is shocking, says Prashant Goyal
20 Dec 2013 5:56 AM IST
Department of Trade and Taxes, Delhi is all set to tighten the noose around tax evaders to recover hundreds of cores of unpaid dues. The department has been examining the data of all individuals, firms and businessmen after discrepancies in their accounts were noticed while analysing their sales tax data and auditing of accounts. In an interview to Millennium Post, Prashant Goyal, trade and taxes commissioner told Sunil Thapliyal about his plans to increase revenue through tax collection in the national capital. Here are the excerpts:
Q: After implementation of Value Added Tax (VAT), it’s been a major challenge for the department to control tax evasion. Now that you are at the helm of affairs, what are your plans to control it?
A: This is a serious issue for the department in particular and for the country in general. The extent of VAT evasion ranges from a few lakhs for some companies to a few hundred crores for fat tax dodgers.
We have started screening of sales tax returns of traders to identify the defaulters. The number of defaulters is shocking.
There are thousands of dealers, including small and big ones, who have been found to be tax evaders. The sales tax data and audit helps officials to gauge the extent of sales and identify possible evasion of VAT. Considering the extent of tax evasion in the city, the department has tightened the noose around the defaulting businessmen.
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Q: Do the tax evaders include individuals too or only small business firms are involved in such cases?
A: No, we cannot categorise this. There are individuals and big companies engaged in diverse businesses — infrastructure, construction, banquet halls and restaurants that are under the scanner of tax evasion.
Q: Who do you consider are more culpable when it comes to tax evasion?
A: We are focusing on the contractors who have so far avoided paying tax on contract works. There are many big contractors who have outstanding tax liability worth crores.
But, strangely, they will not pay taxes and they will prefer to go for a litigation. This has become a common trend.
Q. How can consumers make a difference?
A: Consumers can play a vital role too. Consumers must take a proper bill for every single purchase. This will help compel the seller to file returns resulting in payment of taxes.
Q: What sort of problems are faced by the department in collection of VAT?
A: The absence of business records is one of the problems that officials face while conducting raids. Also, many companies did not keep the records at their registered offices in Delhi but in their NCR offices.
Q: How does the tax evasion take place?
A: Tax evasion takes place in many ways. In the case of banquet halls and caterers for instance, bills are fudged to enable tax evasion.
If they charge Rs 1,000 for a plate, they will show us that the charge was Rs 500. If they have catered to 10,000 customers, they will show us details of 7,000 customers or maybe even less. This results in direct revenue loss to the exchequer.
Q: After implementation of Value Added Tax (VAT), it’s been a major challenge for the department to control tax evasion. Now that you are at the helm of affairs, what are your plans to control it?
A: This is a serious issue for the department in particular and for the country in general. The extent of VAT evasion ranges from a few lakhs for some companies to a few hundred crores for fat tax dodgers.
We have started screening of sales tax returns of traders to identify the defaulters. The number of defaulters is shocking.
There are thousands of dealers, including small and big ones, who have been found to be tax evaders. The sales tax data and audit helps officials to gauge the extent of sales and identify possible evasion of VAT. Considering the extent of tax evasion in the city, the department has tightened the noose around the defaulting businessmen.
Â
Q: Do the tax evaders include individuals too or only small business firms are involved in such cases?
A: No, we cannot categorise this. There are individuals and big companies engaged in diverse businesses — infrastructure, construction, banquet halls and restaurants that are under the scanner of tax evasion.
Q: Who do you consider are more culpable when it comes to tax evasion?
A: We are focusing on the contractors who have so far avoided paying tax on contract works. There are many big contractors who have outstanding tax liability worth crores.
But, strangely, they will not pay taxes and they will prefer to go for a litigation. This has become a common trend.
Q. How can consumers make a difference?
A: Consumers can play a vital role too. Consumers must take a proper bill for every single purchase. This will help compel the seller to file returns resulting in payment of taxes.
Q: What sort of problems are faced by the department in collection of VAT?
A: The absence of business records is one of the problems that officials face while conducting raids. Also, many companies did not keep the records at their registered offices in Delhi but in their NCR offices.
Q: How does the tax evasion take place?
A: Tax evasion takes place in many ways. In the case of banquet halls and caterers for instance, bills are fudged to enable tax evasion.
If they charge Rs 1,000 for a plate, they will show us that the charge was Rs 500. If they have catered to 10,000 customers, they will show us details of 7,000 customers or maybe even less. This results in direct revenue loss to the exchequer.
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