IROs that were entrusted with investigating 518 firms making rampant use of fake VAT bills report that they have completed their investigations into 216 firms.[break]
“Investigations have confirmed that the 216 firms evaded VAT worth Rs 1.67 billion over the past three years,” said a source. “The fake transactions are assessed to have inflicted a loss to the government of Rs 1.09 billion in income tax and Rs 5.82 million in excise revenue,” he told Republica.
Officials at the Inland Revenue Department (IRD) said that the government could collect around Rs 5 billion in tax and fines from businessmen involved in the racket.
“As we are yet to complete the investigations and assess the liability of the remaining 302 firms, we think we will recoup more revenue than we anticipated initially,” said the source.
Inland Revenue Department (IRD), that traced the involvement of 518 firms in fake VAT transactions, estimate the racket to have mis-valued to the tune of as much as Rs 10 billion (over US$ 138 million). Through its action, it expects to realise revenue of over Rs 4 billion.
´No intention to settle tax´
Despite the feat of cracking down on this racket of unprecedented proportions, IRD officials lament that they have not been able to compel wrongdoers to pay due taxes and fines.
“The intention to pay the tax and fines is simply not there. They are still trying everything to court the influence of political leaders to escape the liability,” said an IRD source.
As a result, none of the 216 firms that have already been informed about their tax liability have approached the revenue department for tax settlement.
“The only sum that we have collected so far is the collateral amount that 24 of those firms deposited while appealing for administrative review of the tax officer´s decision,” said the source. The amount stands at around Rs 400 million.
The 24 firms had appealed for reviews by the director general of the IRD. “However, the director general said the assessments were correct in the 20 appeals he has ruled on,” said the source. The verdicts are yet to come on appeals by the remaining four firms.
Going by existing law, these firms now need to either settle their liability within 60 days or knock on the doors of the revenue tribunal.
Once the legal deadline ends, officials said they would take stringent action to recoup the revenue.
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