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Uttar Pradesh government is tightening the noose around tax evading betel nut and paan masala companies and traders operating in the state.
This segment has emerged as top tax evader in UP based on the number of raids conducted and computation of the alleged tax evasion.
In the last 9 months, the Special Investigation Branch (SIB) of the UP commercial tax department had conducted 36 raids against tax evaders. Of these, 13 compaanies manufactured chewing tobacco and were allegedly found involved in tax evasion to the tune of Rs 800 crore.
In these raids, a large quantity of betel nut was seized from the godowns and business establishments.
While, a penalty of Rs 2 crore has been imposed on such compaanies, the department has issued notices for the recovery of evaded tax on the basis of the SIB report.
During August-December 2014, SIB of Lucknow Range had raided 21 firms for alleged tax evasion. During January-April 2015, 15 firms were raided, of which 4 compaanies dealing in betel nut were allegedly found involved in tax evasion. These include some marquee names in the domestic paan masala trade.
Meanwhile, the sanitary tile firms have emerged as the second largest tax evaders with five compaanies found involved in tax evasion. These compaanies have been found evading tax by resorting to fictitious transactions and transporting goods from Gujarat to Lucknow.
In addition, cases of large scale tax evasion have been found in 4 plywood compaanies.
According to the SIB, the registration of tax evading firms had been suspended and they have been put on surveillance.
