Most of the retail outlets, including Shuvakamana, Pal Variety, Krishna, Saket, Galaxy, Chanda Chokari, in the eastern trading hub do not issue VAT bills with the intent of showing lower level of income at the tax office. The business transactions of these shops top Rs 100,000 per day.[break]
“These shops do not issue VAT bills even upon purchase of goods worth Rs 10,000 or more,” Chief of Morang District Police Office, Superintendent of Police Pradhyumna Kumar Karki, told Republica. “These practices are going on unabated due to slackness of tax office in monitoring the situation.”
As per the government regulation, all firms doing business transaction of Rs 2 million or more per year must come under the network of VAT. But due to lack of market inspection by concerned authorities, the government has been losing millions of rupees in revenue.
“Nobody issues VAT bills here,” a trader told Republica on condition of anonymity.
According to him, traders in Biratnagar evade taxes from the time they release goods from the customs office. For instance, a good worth Rs 100 is under invoiced and said to be worth Rs 10 at customs office, he said. This way the trader can release goods by paying less customs duty.
“They then do not provide VAT bills to customers as they fear of being accused of overpricing goods,” the trader said, claiming, “The government is aware of their practices but has remained mute.”
Acting Chief of Inland Revenue Office, Rishi Ram Pokharel, also said that claims that some of the big taxpayers were evading taxes were true. He, however, said shortage of staff has been preventing him and his team from taking action against these businesspeople.
Chief District Officer Suresh Adhikari, meanwhile, expressed willingness to take action against tax evaders if officials of Inland Revenue Office asked for their help.
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