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Sales Tax sleuths blow
July, 09th 2010

The state commercial Sales Tax commissionerate has detected a major scam of High Seas Sales (HSS) to avoid payment of Value Added Tax (VAT) and imposed a fine of Rs 100 crore, including the amount of tax avoidance, interest and penalty on a group of import companies at Kandla.

According to a press release of the commercial tax commissionerate, though HSS is accepted under the import trade regulation, the companies involved in the case had entered into fraudulent HSS deals with a view to avoid payment of VAT.

As per HSS rules, a cargo in voyage after it is loaded onto a ship can be sold to the final buyer and the latter does not have to pay any additional tax like VAT. According to officials, the final buyer saves around 25 to 30 per cent depending on the rate of the VAT on the commodity.

But the commercial sales tax sleuths, during an inspection in the last two days at Kandla, found that nine companies involved in the import of edible oil had shown to have entered into fraudulent HSS deals of edible oil worth Rs 800 crore.

Investigations revealed that the deals were not done on high seas but were local and inter-state sales to avoid VAT. Officials have seized goods worth Rs 60 crore.

In another case, sleuths detected irregularities in stock transfer of imported edible oil worth Rs 75 crore during stock verification at the business premises of an import company at Gandhidham.

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