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Delhi launches crackdown on 10,000 VAT defaulters
January, 06th 2014

The Delhi government's Trade and Taxes department has launched a crackdown on businessmen evading value added tax (VAT) worth hundreds of crores of rupees.
Official sources said many businessmen and dealers in the Capital indulged in manipulation of their VAT accounts to avoid paying taxes, causing huge revenue losses to the state exchequer.

Huge dues

The department officials have zeroed in on about 10,000 dealers having discrepancies in their accounts, and served notices on them.
The Delhi government's Trade and Tax department officials have served notice on about 10,000 dealers whose accounts have revealed discrepancies
The Delhi government's Trade and Tax department officials have served notice on about 10,000 dealers whose accounts have revealed discrepancies
According to an estimate, such discrepancies can lead to outstanding dues of over Rs 500 crore. Moreover, there are many accounts with turnover of over Rs 100 crore for which the department will carry out a special audit with the help of private professionals.

Trade and Taxes Commissioner Prashant Goyal said: "We have started screening of VAT returns of traders to detect defaulters. Shockingly, thousands of dealers have been found to be having discrepancies in their accounts."

Rectify accounts

So far, this financial year, the department has issued over 10,000 notices.
"The number will increase in coming months. All such traders have been given opportunity to rectify their accounts and deposit the outstanding," Goyal said.
A senior official said manipulation has been detected by matching the figures in annexures of 2A and 2 B which is submitted by traders while filing VAT returns.
"2A form represents purchase and 2 B sales. When we matched them there were huge discrepancies in many accounts," the official said.
Considering the large-scale tax evasion in the city, the department has tightened its noose around the defaulting businessmen.

"We detected that manipulation was bigger in the cases of big businessmen whose transactions were in hundreds of crores annually," said a senior officer, adding that they recently concluded a case of tax evasion of Rs 110 crore by a reputed contractor.

"We have issued notices to such companies and many of them have challenged it in courts. In some cases they have approached the Supreme Court after getting no relief from the high court," said the officer.

There are many big infrastructure companies, builders and others who don't cooperate during tax raids.
"We have conducted many raids in past. Strangely, we have found that they don't keep records of their business in their registered office in Delhi. Rather, they keep it in their Gurgaon based offices or somewhere else. We have no authority to raid the offices outside Delhi. In such cases, we generally seal the offices and issue them notices," he said.

Fudging bills

Kunal, IAS, additional commissioner, Trade and Taxes said that in the cases of banquet halls and caterers, massive frauds in billing have been suspected.
"In many cases, they would fudge the bills to evade taxes in crores. If they charge Rs 1,000 a plate they will show us Rs 500. If they have given service to 10,000 consumers, they will show us 7000 or less."

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