The Delhi Government's Trade and Tax Department has been conducting a lot of raids across the city due to an increase in the number of tax evaders. The department has said that the practice of evading Value Added Tax (VAT) by creating bogus dealers has picked up.

Fake tax invoices
Under the VAT system, the bogus dealers (dealers who take registration on wrong credentials and then disappear) issue fake tax invoices on the strength of which genuine dealers claim Input Tax Credit and thereby reduce their liability to pay VAT. Now, the VAT Department has tightened the noose on such bogus dealers.

Speaking on the issue, Commissioner (Trade and Taxes) Sanjiv Khirwar said on Monday “during the week ending August 8, action against bogus dealers were intensified and 45 bogus/high-risk dealers who declared turnover of Rs.868.10 crore in 2013-14 were caught and the certificate of these dealers cancelled. Input Tax Credit (ITC) of Rs.7.43 crore was also disallowed during this week.”

Action will intensify
The raids will continue and action against such bogus sales purchase will be further intensified. The Department not only expects to recover due tax with penalty but also follow it up to ensure that the fraudulent dealers are arrested.