Govt recovers Rs 2 crore VAT under bill reward scheme in four months
NEW DELHI: Over the past four months, the Delhi government has recovered over Rs 2 crore from traders who did not declare value added tax (VAT) against the sale of goods. The trade and taxes department spent Rs 27 lakh as award money to recover the amount under its Bill Banvao Inam Pao scheme.
The scheme encourages people to get bills of their purchases and upload them through the DVATBLL app of the trade and taxes department for a lucky draw. It is proving to be a potent weapon against tax evaders.
Department officials say the scheme has helped zero in on over 350 traders who were either evading tax or were running business with cancelled taxpayer identification number (TIN).
Officials say the scheme, the first-of-its-kind across the country, has been successful in ensuring tax compliance.
“The scheme is aimed at encouraging consumers to claim bills for all of their purchases. All products that come under tax net has a maximum retail price (MRP), which means they are paying the tax component.
“If they don’t claim a bill, chances are the trader will not declare the sale in the tax return. The more consumers are aware of this, more bills will be generated which in turn will increase tax compliance,” said a senior Delhi government official.
Tax evasion cannot be plugged if a trader connives with a consumer and does not generate a bill.
“The scheme is aimed at encouraging consumers, who do not take a bill for a discount, to ask for the bill. We are trying to educate the consumers about tax evasion. They should know that they are helping traders evade tax by not asking for the bill,” an official said.
The department says the response so far has been encouraging .“From getting just over 1,000 bills, we have received more than 11,000 bills in May,” an official said.
Such has been the success of the scheme that other state and central agencies are enquiring about it. “Traders are now scared of breaking the law. They do not know which of their bill will land up in the tax department through the scheme.
“While many traders generate bill, they later delete it from their systems so they don’t have to file returns against the sale. But now they would think twice before doing so as they will be caught during verification for the draw,” an official explained.
The scheme has helped the department in nabbing over 350 traders, who were either trading with cancelled TIN s or manipulating records to evade tax. The government now plans to take action against errant traders.
“We are collecting evidence against the traders indentified through the scheme. A formal case will be registered under section 89 of the Delhi VAT Act that could invite a jail term of up to six months and a fine,” an official said.