Punjab excise department cracks down on firm evading tax

Tax evasion to the tune of Rs 23 crore has been unearthed by Punjab Excise and Taxation Department with a firm allegedly found to be depositing fake forms to evade tax.
A Mandi Gobindgarh-based firm in Punjab had submitted fake C-form worth around Rs 23 crore with regard to sale of steel chairs, said J K Jain, Deputy Excise & Taxation Commissioner (DETC), Ludhiana.
According to Jain said, the company had supplied steel chairs to some Delhi-based firms.
"When a company supplies some products to some firm outside the state (which in this case is Delhi), that firm is charged tax at 2 per cent rate as per the section 8(4) and rule 12(1) of Central Sales Tax Act 1956," he said.

He further explained that "for availing this concession rate, the seller is to submit a C-Form (which in this case are found to be fake). In the absence of C-Form's, the firm has to deposit VAT at 14.3 per cent."
The firm in question had submitted 11 different C-form's worth Rs 22.53 crore with the department and on the basis of this deposited VAT at 2 per cent, Jain informed.

Jain said the department got suspicious and got the C-Form's submitted by the company scrutinised from Trade & Taxes Department, New Delhi.
Assistant Commissioner, Trade and Taxes Department, New Delhi, has confirmed that the C-Form's mentioned by the firm were never issued by the Department, he said.

Had the company submitted genuine C-Form's, they would have been entitled for depositing VAT at 2 percent but as the C-Form's mentioned by them were found to be fake, they would have paid VAT at 14.3 percent, Jain said.
The department has written to the SHO of Mandi Gobindgarh town of Punjab to register an FIR against the company.