Tax evasion practices: No income tax check on mobile store owners

  • Sumeer Singh, Hindustan Times, Ludhiana
  • Updated: Apr 26, 2015 20:28 IST

In a scenario where the sale of mobile phones without billing on a large scale goes unabated in the city, the income tax department has been caught on wrong foot which certainly has no clue about the annual earnings of hundreds of mobile shops and stores, who not only fleece customers by charging arbitrarily, but also evade taxes worth lakhs of rupees annually.

According to sources, hundreds of mobile phone sellers in the city procure mobiles and accessories in bulk from the Chinese market which are often poor in quality and then re-sell them at higher prices without issuing bills for the same. Nowadays, when the advancement in the technology is fastly changing, the shelf lives of the mobiles has reduced to a great extent. Buyers often prefer second hand mobiles, which are available at cheaper rates, and they settle for a bill-less purchase.

The Chinese products currently have a lion's share in the mobile market but most of the sale deals are conducted sans bills, therefore, having no account of the income earned by the dealers, causing losses to state exchequer worth lakhs of rupees every year. The mobile market in the city is one of the fastest growing sector these days.

There are more than 200 small and big mobile shops and stores in the city who operate from Gill Road, Model Town, Dholewal, Field Gunj and Janta Nagar. After noticing the rise of the second hand mobile market, most of the branded mobile phone dealers have taken it up.

An official from the income tax department, seeking anonymity, said, "Dealers provide bills only for the branded mobile phone purchase while more than half of the mobile market is trading without bills which is well within the knowledge of the I-T sleuths. But they are waiting for a complainant who approach them with a formal written complaint so that they can proceed with a raid or scrutiny. The I-T department needs to deal proactively with such cases to discourage tax evasion in mobile industry".

Ranjan Verma, a mobile store owner, said, "In a bid to keep themselves abreast with the technological advancements in the mobile world, the buyers continue to change their handsets frequently and in this selling-buying process, they are least bothered about acquiring a bill for the purchase, thus, unknowingly, paving the way for a bigger tax evasion nexus."

HS Sohi, principal director of Income Tax (Investigation wing) for Punjab and Jammu and Kashmir region did not respond to the numerous phone call attempts.

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