“Initial investigation shows that around 3,200 business firms, mainly small and medium-sized entities having annual transactions of more than Rs 2 million, evaded VAT over the past two years. We are soon instructing concerned revenue offices to launch investigations against them immediately,” Tanka Mani Sharma, director general of IRD told Republica on Wednesday.[break]
Around 2,000 of them are suspected to have evaded VAT during fiscal year 2009/10, while the remaining 1,200 firms are suspected to have involved in VAT evasion during 2010/11.
Sharma, however, did not disclose the amount evaded by those firms.
Most of the firms under the IRD scanner are retail shops dealing on electronics, hardware and sanitary suppliers, and apparel stores.
“Most of these firms are based in the capital and major cities,” said Sharma.
Around 1,700 small and medium enterprises across the country are already into IRD scanner. These firms allegedly inflicted loss of Rs 4 billion on state coffer either by evading VAT or not registering for VAT. Of the 1,700 firms, 560 have annual turnover of over Rs 5 million each, while the remaining have annual turnover of Rs 2 million.
Existing laws require business enterprises with annual turnover of more than Rs 2 million to register for VAT.
Instead of settling their outstanding dues, Sharma said the firms under IRD scanner are exerting pressure on revenue officials for waiver through local chambers of commerce and industries.
“We are facing pressure from VAT defaulters for dues waiver. We´ve also been getting memorandums from local chambers of commerce and industries for such waiver,” added Sharma.
Meanwhile, hundreds of brick kilns that are yet to be brought under VAT threshold have been ignoring the government calls to register with VAT. “Our efforts to get them registered for VAT is not paying dividend,” said Sharma.
Out of around 700 brick kilns operating across the country, only around 200 are registered with VAT.
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