Mumbai Local

Street vendors to come under I-T scanner

Ajay Manohar Satam sells nearly 1,500 vada-pavs every day at his Churchgate stall—Photos: Vijay Bate  

n its first attempt to bring the informal sector into the tax net, the Income Tax department is screening the city’s street vendors and small-time businessmen, including paanwalas, vada-pav and juice vendors to track black money.

Senior I-T officials said the decision was taken after a raid on a popular panwala in central Mumbai revealed huge unaccounted wealth and properties. Now, the department is scrutinising data on vendors registered with the BMC, and records of small shops available with the Labour Department.

So far, data on 62,721 vendors and 21,500 small-time shop owners has been scrutinised to assess their tax liability in the last three financial years, officials said. Stop-filers and non-filers of returns are estimated to be a large part of the black economy that accounts for 75 per cent of the GSDP (gross state domestic product), according to an I-T department report.

The report says, “It is incorrect to believe that those working in the informal sectors, such as the paanwalas, vada-pav and juice vendors are poor, and all those in the middle class bracket are rich. It can be safely ascertained that there is a huge possibility of adding fresh assesses from the informal sector. Most of those in this sector don’t pay taxes, or are evading it.” It also recommends that data be mined from local agencies to find potential assessees.

There are 22 crore PAN card holders in the country and is around roughly stands at 22 crore, while assesses were 4.5 crore in 2015 and the number of taxpayers as of April 2013 was 3.28 crore. In Mumbai, the I-T department is faced with the task of adding 6,23,856 new assesses.

Civic officials said they have provided all help to the I-T department in identifying tax evaders through its Shops and Establishments Department and vendor data available with its Licensing Department.

“The tax regime before 2002 had also attempted to bring these people (vendors) into the tax net, but somehow the drive never took off,” a official with the BMC said.

I-T officials believe all external sources contain almost 10 lakh pieces of information, and huge potential for finding significant numbers of new assesses.

Vendors protest government's ‘bribing culture’

Street vendors say they don’t mind paying taxes as long as the security of their street business is assured by the government.

Vidvasano Yadav, who runs a bustling pan stall outside Churchgate station, says this isn’t the first such attempt by the taxman. “A decade ago, the I-T department had asked us to pay Rs 1,400 as tax every year, but we couldn’t comply even after we had been served notices. We have to repeatedly bribe government officials for licenses and other permissions, so paying taxes is unthinkable. If the government assures to do away with this bribing culture, we are ready to file tax returns,” he adds.

His son Krishna, like many others, doesn’t want to be part of the street business but insists his father files his I-T returns to ease documentation. “I am preparing for future studies abroad, and it would be convenient if my father has his documentation in place when I apply for a visa and other purposes,” says Krishna.

Many street businessmen, however, are filing returns for their children’s future. Ajay Manohar Satam, whose CTO vada-pav stall at Churchgate sells approximately 1,500 vada-pavs every day, says he has been filing returns since 2002. He insists that the government and BMC improve their licensing and permission mechanisms for the informal sector in general.

“I was forced to pay my returns to prepare documentats for my two sons, who are preparing for higher studies in information technology. The thinking is changing among vendors when it comes to taxation, but what is the guarantee that they will not be harassed once taxes are paid?” asks Satam.

“We believe the most common labourer in the informal sector are street vendors. Their ability to evade taxes and get around other regulations is an economic motivation, and taxation is a way of streamlining these anomalies,” a senior I-T official said.

So far, data on 62,721 vendors and 21,500 small-time shop owners has been subjected to scrutiny

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Printable version | Jun 18, 2021 3:28:18 PM |

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