The Tamil Nadu Commercial Taxes Department is investigating tax suppression and evasion to the tune of Rs 1,522 crore for financial year 2014-15.
The department is investigating intra (within the state) and inter-State (with other States) transactions by collecting data from Central and State government agencies and analysing tax evasion by certain dealers in Tamil Nadu.
Based on the data collected from other States, 315 investigation files have been opened with prima facie tax suppression of Rs. 894 crore, according to an official release. Apart from this, verification of inter-State data by territorial circle offices resulted in detection of tax evasion of Rs. 628 crore in 205 cases (in terms of tax due and penalty), taking the total to Rs. 1,522 crore.
A Commercial Taxes department official, who wished anonymity, called it a routine exercise. Data was collected from Customs, Central Excise, Income Tax department, check posts, and Commercial Taxes department.
“The key message that we want to bring to the notice of public is that the Commercial Taxes department is looking at third party data within and outside the State [in case of sale made to others states] to verify if dealers are filing returns properly,” he said.
The official said that all the cases are under various stages of investigation and implementation. “In some cases we have issued a notice, we are also in the process of collecting the tax money in some cases,” he said.
In 2014-15, a field audit was completed in 1,243 high risk cases and surprise inspection was conducted in 1,610 cases under the TNVAT Act. “A total of Rs 108.80 crore was collected after the surprise inspection,” the officer said.
Further, proposals were evolved based on the result of audit and inspection with a total revenue effect of Rs 5,178 crore. “This amount of Rs 5,178 crore is proven tax evasion, while the others are in the investigation stage,” the officer noted.
When asked how much of this would be recovered immediately, the official said, “Usually 25-30 per cent is recovered. The rest goes to court and in some cases they come up with further clarifications.”
Commercial tax is a major source of revenue, as it contributes 64 per cent of the State’s own revenue. The department has requested dealers across the State to maintain accounting software and data and file returns.
