The state sales tax department has unearthed a hawala racket that was behind the evasion of a huge amount of tax.

This year, in 660 different raids conducted across the state by the investigation wing of the department, it was found that traders have evaded Rs 212-crore tax on a turnover of Rs 2,300 crore.

Sanjay Bhatia, commissioner of sales tax said that these evaders obtain registration under the Maharashtra Value Added Tax Act and procure sale bills without conducting any transactions. The department has taken action against over 550 traders.

Most tax evaders are auto dealers and also include those involved in the trading of iron and steel, non-ferrous metal, computer parts, marble, edible oil and paper.

A separate wing, the Economic Intelligence Unit (EIU), has been set up to deal with such fictitious transactions. "The data available with this unit will be shared with income tax, central excise, municipal authorities and other such agencies,'' Bhatia added.

Appreciating the efforts made by the department to nail the culprits involved in tax evasion, the state finance minister Jayant Patil said, "In comparison to the last financial year, the department is expecting a 21% jump in the revenue that is collected as sales tax.'' In the last financial year, the sales tax department had collected nearly Rs 31,000 crore.

Citing that the results of the first two quarters were according to expectations, Patil said, "The global meltdown will certainly affect the target . It is difficult to assess the damage at this juncture.''

To encourage more traders to file their returns, the state government has introduced a quicker system of e-return and faster refunds. However, out of four to five lakh traders who file their returns, only one lakh make use of this technology. More than 900 traders from Mumbai and 2,000 traders from the rest of the state pay over Rs 1 crore as tax to the department. "For such large taxpayers, a single window system has been started,'' Patil added.