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VAT evasion: Smuggling causes Rs 500-crore losses, annually

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Aman Sood

Posted: Feb 05, 2009 at 0043 hrs IST

Patiala Despite a Rs 1,500-crore increase in VAT revenue this fiscal, the Punjab government continues to lose hundreds of crores yearly due to smuggling of trade goods by organised mafia.

Reacting to Deputy Chief Minister Sukhbir Singh Badal’s recent statement that VAT collection is the state’s largest source of income, a senior excise and taxation official says, “These figures could improve by almost Rs 500 crore annually if the government gets serious in manning the borders.”

Sources say smugglers that operate in Punjab have a wide network that stretches across borders. They are so well-connected that news of excise teams’ movement reaches them immediately.

AETC LK Jain says, “They are in touch with railway crossing guards, tea-stall owners, district police officials and others who inform them as soon as any excise vehicle is spotted. Their modus operandi is to enter Haryana and leave their loaded vehicle after turning it topsy-turvy so that we cannot bring it back, as it becomes a case property of that state. And in the meantime, they manage to claim the goods.”

Jain says, “There are five to seven gangs involved in trafficking smuggled goods. Recently, a gang kidnapped a constable near Ghanaur along with the smuggled goods and tried to throw the truck into a river in Haryana.”

“The Patiala Police are yet to register a case, so we are writing to senior officers,” says Punjab Excise and Taxation Commissioner A. Venu Prasad.

The Punjab Vigilance Bureau had also recently registered cases against several tax officials for their ties with smugglers, but the accused officials continue to serve in the department.

Excise and Taxation SSP Mandeep Singh Sidhu says security is provided to ETOs, and he himself had recently carried out a raid and had nabbed tax evasion worth Rs 20 lakh after gang members tried to overpower his team. “The gang members move in groups and are heavily armed men who try to overpower the taxation officials,” he adds.

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