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Income Tax Department raids several companies evading tax through hawala, bogus entries

According to the Ministry of Finance, the companies were involved in import of electronic goods, digital marketing, solid waste management, and were evading taxes including income tax, custom duty, GST by adopting various modus operandi.

SNS | New Delhi |

In a series of raids in various parts of the country, the Income Tax officials found tax evasion to the tune of Rs 2070 crores by several companies using Hawala transactions, under invoicing, and bogus entries in the books of accounts.

According to the Ministry of Finance, the companies were involved in import of electronic goods, digital marketing, solid waste management, and were evading taxes including income tax, custom duty, GST by adopting various modus operandi.

In the first case, the Income tax department found that some companies were importing electronic goods of high value and declaring them low value goods to evade custom duty. Like in one case the companies declared import of HDMI cables worth Rs 3.8 lakhs, but when the container was physically checked, it was found that the imported goods were high value laptops, mobiles, which were valued at Rs 64 crores, said a senior officer of the Income Tax Department.

This way they had evaded custom duty on imported products to the tune of 64 crores, he added. According to a rough estimate made by the Income Tax Officials, the accused persons have imported high value electronic items to the tune of Rs 2,000 crore during the past three years but under-invoiced it to mere Rs 20 crore, thereby evading tax on goods worth Rs 1,980 crores.

The modus operandi involved import of goods in the name of shell entities at under-valued or wrongful declaration of description of goods imported, with an intent to evade customs duty. The evidence seized during the course of the search revealed that the payments for such under-invoiced goods to the foreign consigners have been made through hawala channels.

The preliminary investigations revealed that the wealth, so generated, was diverted to acquire high value immovable properties, disguising cash introduced in the form of bogus rental income and bogus unsecured loans.

In another case a group of companies was engaged in digital marketing and campaign management. It allegedly obtained bogus entries by facilitating transfer of cash and unaccounted income through Hawala.

They had also indulged in unaccounted cash payments and booking their personal expenses as business expenses. The directors of the companies purchased luxury vehicles in the names of employees and entry providers to further evade taxes.

Another group of companies engaged in the Solid Waste Management comprising solid waste collection, transportation, processing and disposal services across the country, primarily catering to Indian municipalities was also showing bogus bills and entries to avoid tax.

During the course of the search, it was found that the group had indulged in booking bogus bills for expenses and sub-contracts. A preliminary estimate of such bogus expenses booked is to the tune of Rs.70 crore, the Income Tax Officials said.