MVD traces tax evasion running into crores

140 luxury cars registered outside State using fake addresses

March 27, 2014 09:07 am | Updated May 19, 2016 11:53 am IST

The State Motor Vehicle Department (MVD) has unearthed tax evasion of more than Rs. 8 crore by at least 140 luxury car owners, including celebrities, by registering their vehicles using fake addresses in the Union Territory of Puducherry.

A four-member team of MVD officials which visited Puducherry towards the end of last year to verify the registration addresses of about 150 such vehicles registered during 2012-13 were stunned to realise that about 95 per cent of the addresses were outright bogus. In fact, 14 different owners were found to have registered their vehicles in one address.

Transport Commissioner Rishi Raj Singh ordered the operation supervised by Deputy Transport Commissioner P.A. Sainudheen and Ernakulam RTO (Enforcement) N.K. Raveendranathan.

To substantiate their findings, the MVD officials gave the addresses to tahsildars of four taluks in Puducherry for further verification. “We have received affirmative reports in about 25 cases and reports in the remaining cases are expected within a couple of months. We have sent notices to the owners concerned to appear for a hearing next month based on the report received. Apart from paying the revised tax rate of 17 per cent that will come into force from April, they will have to face criminal case for having forged documents.

With the MVD initiating action, some owners have started taking No Objection Certificate from Puducherry to cancel registration of cars there and to get it registered here,” Vinodkumar N., a Motor Vehicle Inspector with the Ernakulam Regional Transport Office who was part of the visiting team told The Hindu .

The loss has been roughly calculated taking Rs. 30 lakh to Rs. 50 lakh as the average price of cars.

The fact that some of these cars cost Rs. 1 crore or above means that the loss to the State exchequer could well be more than Rs. 8 crore, Mr. Vinodkumar said. Puducherry has become a haven for tax evaders among vehicle owners from the State for its negligible tax rate. For instance, a luxury car worth Rs. 50 lakh needs to pay jut Rs. 1 lakh in Puducherry while in Kerala the owner will have to pay 15 per cent of the price, which comes to a hefty Rs. 7.50 lakh.

There is nothing wrong in registering a vehicle in Puducherry and operating it back and forth between Kerala and Puducherry. But the owner will have to pay tax in Kerala if he operates the vehicle continuously here for a period of six months or more.

“But there is no way to prove how long a vehicle has been operating in the State, as owners invariably claim that they had been in the State only for a while. That’s why we decided to verify their registration address in Puducherry,” said Vinodkumar.

The MVD has now intensified the drive to locate more vehicle owners resorting to tax evasion through the registration route. Ten such luxury cars were intercepted in Ernakulam RTO limits on Tuesday alone.

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