E-Paper
Ingot traders cheat T-T Dept of Rs 100 cr
IN ONE of the biggest trade tax scams, the nexus between the iron mafia and the trade check-post officials has caused a staggering Rs 100 crore revenue loss to the State exchequer. A probe conducted into the scam has revealed that trucks loads of iron ingot (used for making iron rods) that came from states like Bihar and Orissa were sold off to iron industries in UP. However, records were fudged to show that these trucks unloaded the ingot in Uttaranchal and Himachal Pradesh.
IN ONE of the biggest trade tax scams, the nexus between the iron mafia and the trade check-post officials has caused a staggering Rs 100 crore revenue loss to the State exchequer.
A probe conducted into the scam has revealed that trucks loads of iron ingot (used for making iron rods) that came from states like Bihar and Orissa were sold off to iron industries in UP. However, records were fudged to show that these trucks unloaded the ingot in Uttaranchal and Himachal Pradesh. The fraud was done to evade tax applicable on the inter-State sale of goods.
This deliberate evasion of T-T began in September 2005. However, on June 15 the fraud was detected when the trade tax commissioner ordered an inquiry into the matter.
Under the UP Trade Tax Act, if a trader transports a commodity from another State to sell the same in UP, he has to take Form 31 from the entry check-post so that the tax due on the consignment could be recovered from him. However, if a transporter brings the consignment to UP but sells it in a third State, he needs to collect entry Form 34 at the first check-post in UP and get the same cancelled at the last exit post. And if he fails to get the entry form cancelled, the consignment will be deemed to have been sold in UP.
On detection, the trader will be liable to pay the tax due on the goods at the rate applicable and 40 per cent penalty.
The probe revealed that the Naubatpur check-post near Varanasi issued around 2500 entry forms to trucks entering from Bihar and Orissa and going to Uttaranchal and Himachal Pradesh. So, most of the entry forms issued by the Naubatpur check-post were supposed to be cancelled at the Bhaguwala check-post in Bijnore, while some of them were to be cancelled by the Kotwan check-post in Mathura and the check-post near Bareilly. In reality, however, no entry form was cancelled though fraudulent means were adopted to reflect the same.
Sources said all the trucks unloaded the ingot in UP and transferred the mineral to iron industries in Kanpur, Malawan, Bharu, and Moradabad. A particular iron industry in Bijnore is said to have got a lion’s share of the ingot.
Sources said each truck carried ingot worth Rs 8-9 lakh. The tax applicable on ingot is 4 per cent and for the illegal act it attracts 40 per cent penalty on the total consignment cost.
Going by the fact that around 2500 trucks were unloaded in UP, the tax loss to the exchequer comes to around Rs 100 crore, sources revealed.
Joint Trade Tax Commissioner, Varanasi circle, SD Dwivedi, who is conducting the inquiry, told Hindustan Times on telephone that the tax was being recovered from the trucks.
But the possibility of tax evasion in an organised manner in other parts of the State cannot be ruled out.
