Punish the guilty and help the victims, CAIT urges Sales Tax Department over VAT issue
September, 12th 2014
In a disturbing development, it has come to the fore that the Sales Tax Department is hunting after the tax abiding genuine VAT dealers who are victims of defaults committed by tax evading dealers. The Sales Tax Department is not taking stringent action against tax evaders & non-compliers of tax laws, said National President of Confederation of All India Traders B C Bhartia while raising the issue before Additional Commissioner of Sales Tax, Nagpur G.B. Indurkar.
A delegation of traders under guidance of B C Bhartia and led by President CAIT Nagpur Branch Kishor Dharasivkar met Additional Commissioner of Sales Tax, Nagpur G.B. Indurkar and submitted a memorandum drafted by Nikhilesh Thakar concerning the issues of disallowance of Input Tax Credit to genuine tax compliers for genuine purchasers. The need for submitting a memorandum arose due to recently introduced Computerized Disk Audit (CDA) by Sales Tax Department.
Recently dealers are receiving notice for Computerized Desk Audit (CDA). The major points for issue of notices covered under CDA are non-granting of input credit due to non filing of returns by the selling dealer and/or non-payment of tax by the selling dealer. The memorandum stated that “They do not deny that there are some elements who are indulging in unscrupulous activities. It is a fact that there are black sheep in every field of life however that does not mean that the whole group or community should be treated as bad. Majority of the dealers facing brunt of disallowance of ITC are small traders. It is a fact that almost all of them are genuine dealers. They carry out their business with small resources and cannot afford to waste their time in indulging unscrupulous activities resulting in wastage of time & money.
“Maharashtra Value Added Tax 2005 is a complete legislation which provides for dealing with each possible situation or eventuality. On one hand there is provision for denying input tax credit to those who have paid tax on purchases but the selling dealer has not deposited the same in govt. treasury. It is unfortunate that the department is denying input tax credit to the dealer where their selling dealer has not deposited tax but no required & expected action against those who have collected tax but not deposited in Government treasury is being taken or appears to have been taken. The general perception is that in such cases the department is punishing victim and wrong doers or say thieves are being protected and are roaming scot-free. This is giving birth to discontentment amongst law abiding tax prayer”, said the memorandum
They claimed that they are aware that the Sales Tax Department is taking this action in the ambit of law but we feel that the department is not taking enough steps to recover money from the people who have collected tax from genuine buyer and are failing to deposit the same with the treasury.
The memorandum added that before taking any action of recovery against genuine tax payers all the weapons in your armory to recover tax from defaulters should be exhausted. The provisions of penalty and prosecution in any law are for purpose of deterrence and not for punishing any one. The delegation also felt that, if these provisions of deterrence are vigorously implemented against defaulting people it will act as a major step to create fear in mind of the people carrying on wrong activities.
G B Indurkar gave a patient hearing to the delegation. He informed the delegation about the amnesty scheme of late fees of Rs. 1000 instead of Rs. 5000 per return for late return for period up to for 2014. This scheme is in force till September 9, 2014.
The delegation included Farooque Akbani, Prabhakar Deshmukh, Dhyaneshwar Rakshak, Rajkumar Gupta, Anil Nagpal, Ravindra Gupta, Asandas Balwani, Prakash Jai, Lalchand Gupta, Salim Ajani and Manohar Bante, informed General Secretary of Team CAIT Nagpur Farooque Akbani.