Sales Tax department unearths Rs 1,000 crore VAT evasion; files FIRs

MUMBAI: Raids conducted by Maharashtra Sales Tax department have unearthed tax evasion of Rs 1,000 crore, involving 1,150 hawala dealer and 37,000 beneficiaries.

"The checks were carried over last six months and FIRs have been filed in several cases," sales tax commissioner Sanjay Bhatia told PTI.

The official attributed the accomplishment to the computerisation of the department.

Of the total amount, Rs 400 crore have already been collected and the process to collect the remaining amount is underway, Bhatia said.

The sales tax department formed a special cell called Economic Intelligence Unit three years ago. It looks into cases of dealers claiming false credits, hiding turnover, and even hawala transfers.

Hawala entails making bogus invoices to allow a trader to claim tax credits. In this racket, the hawala operator, posing as the 'seller', exists only on paper and gets a cut in return.

Some beneficiaries had even dragged the department to the Bombay High Court challenging the provisions of VAT Act, but the transparency and handling of voluminous transactions with precise accuracy as a result of the IT initiative, led to the Court upholding the actions of the department, he said.

The department raided major beneficiaries who have evaded a huge quantum and also sent notices to around 37,000 dealers across the state, giving them an opportunity to make payment and escape actions like prosecution, another department official said.