Certain have been using fake hawala bills to inflate their turnover, a sales tax department investigation has found. Achievement of a certain level of turnover is an entry-level criterion for companies to bid for such big-ticket (multicrore) projects.
Hawala dealers are engaged in the dubious business of issuing fake bills (ones without dispatching goods) for a commission to help companies evade tax. The official said in certain cases, it was also found that infrastructure companies had issued fresh bills to such hawala firms after accepting bills from them to effect circular transactions. The higher turnover level is also required if a project contract necessitates collaboration with a foreign firm.
Confirming that the use of hawala traffic was a new trend in infrastructure and civil work contracts, another senior official said this mode of tax evasion has been traditionally detected in the high-risk commodity sector, which includes goods such as iron and steel and non-ferrous metal, among others. Apart from bagging projects, achievement of turnover targets is also a criterion for higher gradation according to norms set by government organisations.
The dubious transaction impacts sales tax collections as beneficiaries claim tax deductions on their basis. Imports on computer parts were another sector in which such dubious transactions are being detected of late, an official said.
The department has conducted nearly 1,300 raids and detection evasion on transactions worth Rs 2,500 crore. A senior official said that tax recovered in evasion cases so far was Rs 250 crore.