Punjab News- Punjab Sales Tax Department starts scrutinising returns of major players

Jalandhar, October 9, 2013: Anurag Verma, Excise & Taxation Commissioner, Punjab informed today that the Punjab Sales Tax Department has started scrutinising the returns of the major players trading on National Spot Exchange Limited (NSEL) to assess their Value Added Tax (VAT) liability.
Verma said that the Department has come across the case of M/s. Globe Commodities Ltd., Kapurthala, one of the major players on NSEL. He stated that during the year 2012-13, the firm had shown total sales of Rs.88 crores in its VAT returns. On this basis, the firm was liable to pay a tax of Rs.4.40 crores. But the firm tried to neutralise its tax liability by showing intra-state purchases worth 74.7 crores out of which purchases worth Rs.64 crores were made from M/s Dunar Foods Pvt. Ltd. and Rs.10.7 crores from M/s. Bharat Food Agro Pvt. Ltd. etc. The firm claimed Input Tax Credit (ITC) of Rs.3.92 crores on the basis of these purchases.
He said that the department felt that these purchases were not genuine. So, the department asked for evidences in support of these purchases and proofs of payment of tax deposited by the selling dealers.  The bank statements of M/s Globe Commodities Ltd., Kapurthala were also scrutinised, which revealed that they had made no payment  to M/s Dunar Foods Pvt. Ltd., M/s Bharat Food Agro Pvt. Ltd. etc. for the alleged purchases and no tax had been deposited by the selling dealers.  In light of this M/s Globe Commodities Ltd., Kapurthala was asked to show the Goods Receipts (Bilties) and Trip-Sheets, but he failed to do so. It was further found that no truck numbers were mentioned in the bills. In the light of this, the huge ITC claim of the dealer has been rejected and a tax of Rs.5.14 crores has been imposed on the dealer.
Verma said that in the light of the news item appearing in various newspapers regarding NSEL, the Excise and Taxation Department, Punjab has been examining the VAT liability of the traders on NSEL Platform. He said that on scrutiny and analysis, it has been found that the NSEL is a delivery based exchange. The circulars placed on the website of NSEL clearly recognize that the buyer shall be liable to issue tax invoice and pay VAT/Sales Tax. Further, in case of inter-state movement of goods, the buyer has to submit requisite ‘C’ forms and pay CST as applicable.
Verma added that in the coming days, the Department will be scrutinizing the returns of all the Punjab based dealers who have traded on NSEL and wherever it is found that the tax due to the State has not been paid, the department will exercise all legal powers at its command to recover the tax due to the state. www.cityairnews.com