Local cigarette firms caught evading tax through chicanery
PATNA, June 19 -- The Commercial Taxes Department on Wednesday unearthed two cigarette manufacturing units - one at Hisua in Nawada and the other in Patna City - belonging to a firm suspected of evading taxes worth crores by undervaluing shipments and suppressing its annual turnover, officials said.
Sources said the detection followed the interception of a truck during a special vehicle-checking drive in Biharsharif, Nalanda, on Tuesday evening. The truck was declared to be carrying matchsticks, but during the search, a large consignment of locally branded cigarettes was discovered inside.
"The e-way bill accompanying the shipment showed the goods were being transported from Hisua to Ranchi, but upon verification, we found the firm mentioned in the documents-supposedly based in Ara-was non-existent," said an official aware of the investigation.
Subsequent checks revealed that the cigarettes were being manufactured by a firm operating illegal units in Hisua and Patna City.
"This was a clear case of tax evasion. The company was transporting cigarette consignments disguised as matchstick shipments to various destinations to evade taxes," another official added.
Commercial Taxes Commissioner-cum-Secretary Sanjay Kumar Singh said a detailed examination of the e-way bills led to the identification of the two units. "The firm has been running clandestine operations for quite some time. One of the firms mentioned in the documents turned out to be fake-an offense in itself. We suspect tax evasion to the tune of several crores. Action will be taken under relevant tax laws," Singh said.
Officials said that district magistrates of Nawada and Patna have been asked to conduct detailed inquiries into the functioning of the two identified units.
Sources further revealed that the owner of the firm-believed to be from Andhra Pradesh-has questionable credentials. "Several top cigarette companies had flagged concerns about illegal operations by local firms. We are now investigating whether more such firms are involved in this kind of clandestine trade," an official from the raid team said.
He added that the estimated evasion includes Central Excise Duty (CED), Goods and Services Tax (GST), cess, and applicable penalties....
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