The state commercial tax department has carried out an extensive inspection of ledger books of 950 eateries across Gujarat to check for evasion of value added tax (VAT).
The inspection was carried out at hotels and restaurants. M M Srivastav, commissioner of state commercial tax, said, The inspection was carried out for two days and, if needed, it would be extended.
About 545 officials from the commercial tax department were involved in the operation.
During the inspection, the bills were checked for any tax evasions resorted to by the owners.
The department checks the number of employees, electricity consumption and the interior decoration of each hotel to estimate the kind of income that can be generated from the business of an individual hotel.
The department has kept drop boxes at eateries for the customers to drop their bills to pick up lucky winners of the lottery scheme being conducted by the commercial tax department.
The aim of the lottery scheme is to encourage consumers to insist on bills so that shop owners are compelled to pay VAT.
Speaking to Business Standard, Bhupendra Khakhar, president of Rajkot Hotelier Association, said, "The inspection was conducted to ensure that hoteliers were adhering to VAT regulations. Initially, there was 4 per cent sales tax on hotels and restaurants. After the introduction of VAT, it was hiked to 12.5 percent, which was in force till September before it was reverted to 4 per cent."
As the government has stipulated a few set of rules prior to revising the VAT structure, officials also checked if the owners were charging above 4 per cent tax, added Khakhar.
A VAT official in the department did not rule out more inspections in the near future.