‘Probe into vehicle sales tax scam’ | mumbai | Hindustan Times
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‘Probe into vehicle sales tax scam’

mumbai Updated: Feb 05, 2011 00:56 IST
Neha Ghatpande
Neha Ghatpande
Hindustan Times
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Following allegations of a scam by the Shiv Sena, the Sales Tax department on Friday said it has ordered an internal enquiry into the `mistake' of levying less sales tax on vehicles. Earlier, Desai met chief minister Prithviraj Chavan and requested a CBI enquiry into the scam.

Shiv Sena leader Subhash Desai, on Friday, alleged that the state had lost revenue of Rs15,000 crore as a bogus notification was uploaded on the government's website, which stated that the sales tax charged on motor vehicles with engine capacity of 950 cc and higher was 2% as opposed to12.5%.

The incorrect levy of tax took place from 2005 to 2010, causing loss of revenue to the state, alleged Desai.

"When we investigated further, we found that such a notification was not issued on paper with signature of the governor at all. When we questioned the sales tax officials the notification was removed from the website,"said Desai.

According to him, the notification was originally meant for taking 0.5 % sales tax on mobile handsets issued in 2005.

In its reply to the allegations, the Sales Tax department in a statement said that an internal enquiry had been ordered into the matter but insisted that there would be no loss to the exchequer.

The department claims that the sales tax in 2005 was 4% for interstate trade and commerce.

Since 2008, the figure was brought down to 2%. Hence only transactions that took place between 2005 and 2007 were affected to the tune of 2% per transaction.

The department pegged the loss at around Rs 400 crore but said it can be recovered through the refunds of the manufacturers, which are still with the department.

Desai has filed an RTI application asking about the number of vehicles that were sold with a levy of 2% sales tax and why the notification was removed from the website.

The Sales Tax department has written to him saying that the information will be provided within the next 15 days.