Tax evasion racket worth Rs. 10 crore unearthed

An unregistered firm was found to have imported stocks, in the form of television sets worth Rs. 50 crore, on which it was evading paying VAT.— File Photo

An unregistered firm operating in the area was found to have imported stocks, in the form of television sets worth Rs. 50 crore, on which it was evading paying Value Added Tax (VAT)

The Department of Trade and Taxes, on Sunday, claimed it had unearthed a tax evasion racket worth Rs. 10 crore in the Capital's bustling Karol Bagh market.

According to a senior Delhi government official, an unregistered firm operating in the area was found to have imported stocks, in the form of television sets worth Rs. 50 crore, on which it was evading paying Value Added Tax (VAT) which, as per the provisions of the Delhi Value Added Tax (DVAT) Act, 2004, is a criminal offence under the Indian Penal Code.

Commissioner, Trade and Taxes S. S. Yadav said the operation against the said firm was conducted by the enforcement wing after receipt of information to the effect that an unheard-of firm was selling imported, high-value LED TVs in Karol Bagh.

“A clandestine survey of the area was conducted by an enforcement team following which the Department studied both the modus operandi employed by its operators in addition to gathering information about warehouses which were being used to house the allegedly illegal consignment,” Mr. Yadav said.

According to Mr. Yadav, the information so gathered was found to be adequate for a raid following which the proprietors of the firm admitted to the illegal purchase and sale of the said television sets. Various documents were also seized by the enforcement team.

“The firm was not even registered with the Department of Trade and Taxes and was not paying any tax although its turnover is above the threshold limit. As per Delhi Value Added Tax Act, 2004, any person or entity having annual turnover of more than Rs 20 lakh has to mandatorily register with the Department, get a TIN number, file quarterly returns and deposit the tax monthly,” said Mr. Yadav.

Alleging that the estimated tax evasion by the firm was found to be to the tune of Rs 10 crore, Mr. Yadav said the Department had initiated action against the firm under various penal provisions of the DVAT Act 2004.