Taxmen on the prowl for duty evaders
Armed with information from third party vendors, the taxmen would swoop down on companies found evading indirect taxes.business Updated: Oct 02, 2008 22:12 IST
If you are running a business, have paid your transporters and other service and input suppliers through cash or other means to evade taxes. Beware.
Armed with information from third party vendors, the taxmen would swoop down on companies found evading indirect taxes. The information system is broadly modelled on the lines of the annual information return (AIR) filed by banks.
Earlier this week, the government issued notification to “facilitate collection of information from third party sources or from manufacturers themselves, in order to identify manufacturers with a propensity to evade taxes and to create an atmosphere of voluntary compliance”.
The government had earlier carried out a similar survey on ostentatious display of wealth and sent out letters to big spenders, reminding them to file returns. The government had collected the information from sellers of expensive consumer items and the AIR.
Introduced in 2004, AIR mandates banks and financial institutions to furnish information about high-value accounts and transactions.
Among the information that is now being collected include installed power connection, financial details of sales purchases and monthly consumption of such inputs.
“The central excise field formations have also been advised to identify evasion prone commodities,” a finance ministry official said.