Tax evasion right in Telangana Secretariat

​Hyderabad: The evasion of Value Added Tax (VAT) is going on unabated causing loss of lakhs of rupees to the exchequer. The suppliers of packaged drinking water to the Secretariat did not even register for VAT till now, even though they are being paid hefty bills.

There is no sign of action taken either by the commercial tax department or vigilance officials against these violations. The details of a sample of six suppliers revealed that they are not registered either as TOT dealers or as VAT dealers.

According to Telangana Value Added Tax (VAT) Act, 2005, tax at the rate of 14.5 per cent should be paid for every sale of Rs 100. The section 17 of the Act clearly says that vendors whose turnover exceeds Rs 7.5 lakh per annum should be registered as Turnover Tax (TOT) dealer.

Vendors whose turnover is more than Rs 50 lakh should be registered as VAT dealer. Even section 2(10) clearly defines who comes under the dealer limit.

The Secretariat complex in Hyderabad has 32 departments for Telangana and 38 departments for Andhra Pradesh, until recently.

Thousands of employees of various wings have been discharging their duties here. Uninterrupted supply of mineral water to the Secretariat has been going on for several years. The respective departments are paying the bills for the packaged drinking water on a monthly basis.

But the suppliers did not bother to pay VAT. This is evident from the website www.tgct.gov.in.
This RTI correspondent of The Hans India found that the government treasury receives a meagre share in the form of commercial tax from the suppliers of packaged drinking water worth lakhs of rupees.

Even this matter was taken to the notice of ‘Reward for Informers’, which is an initiative of the government to track the evaders of commercial tax. The RTI correspondent sought information from Vengala Rao Nagar Circle Commercial Tax Officer under RTI Act.

According the information provided by the Vengala Rao Nagar Circle Commercial Tax Officer, a dealer, Satya Aqua Labs, who did not register for TOT, supplied packaged drinking water in February of 2015 to the Combined Authentication and Attestation at the Out Gate of the Secretariats of AP and TS.

The turnover was Rs 1, 365 and the dealer evaded sales tax of just Rs 198. Again in March the turnover was Rs 1, 575 and sales tax of Rs 228 should have been paid. A fine of Rs 426 was levied for the tax evasion.

In case of tax evasion, the officials are empowered to assess the taxes for the last four to six years and impose double the tax as penalty which was supposed to have been evaded. But in all the six cases which were revealed, that did not happen.

In another instance, the Planning Department of Telangana alone paid Rs 5,670 for packaged drinking water in March to Srimannarayana Agencies.

As per the VAT Act, the suppliers should obtain GRN or TIN number. It is not sure how many agencies are actually supplying water to the Secretariat. But all the departments have been paying the bills generously to these suppliers.

The commercial tax officers are turning a blind eye even though the regular suppliers have not registered for TOT or VAT.

All these irregularities are going on the premises where the Chief Minister and his Cabinet members along with top brass are present. Incidentally, the portfolio of the Commercial Tax is with the CM himself.

According to the information obtained under RTI Act, the below mentioned suppliers of packaged drinking water to the Secretariat did not register for VAT.