Parliamentarians at the Public Accounts Committee (PAC) today directed the Finance Ministry to make the names of Value Added Tax (VAT) defaulters public within seven days.
It is the basic right of the public to know the names of criminals, who have robbed the state coffers, a member of the committee Deep Kumar Upadhyaya, said, adding that the VAT fraud scam is not related to tax avoidance or evasion but is a financial crime carried out in a planned manner.
The 518 firms had not only under-reported or evaded their VAT compliance but also cheated the government and robbed billions from the public purse by creating fictitious trade and invoices, he added.
Appreciating the role of the Finance Ministry in investigating the cases, the parliamentary committee also urged
the ministry to investigate into whether employees too were involved in providing ideas
to VAT defaulters to take unwanted benefits.
The investigation of the Finance Ministry has clearly
revealed that creating fake transactions and producing counterfeit invoices are rampant throughout the country, said Upadhyaya. The ministry should promptly investigate the conduct of its own employees to identify whether they were involved in the multi-billion scam.
The committee also directed the ministry to provide firm-wise details of the fraud. The committee directed the ministry to submit firm-wise details of the VAT fraud amount and the fines fixed within
seven days, president of the Public Accounts Committee Ram Krishna Yadav said.
The committee also objected to the Finance Ministrys recent decision of transferring the joint secretary at the Department of Customs Laxman Aryal who was involved in the investigation of 518 firms that were involved in VAT fraud to the Revenue Tribunal. We directed the Finance Ministry not to transfer the employee, who was the investigation officer, to the judicial body, Yadav added.
Though late by its own calender, the Finance Ministry has recently completed the investigation of 518 firms involved in the VAT fraud scam and assessed a total of Rs 6.59 billion revenue leakage through those firms. The businesses can seek an administrative review or pay the fine and tax fixed by the committee. The businesses can approach the Revenue Tribunal if they are not satisfied with the administrative review.
The Public Accounts Committee, objecting to the recent budget transfer, today asked the Finance Ministry to send the ministry-wise detail of budget transfer within May 2. It has also directed the ministry not to spend the budget that was earmarked for social security for other purposes.