TAX DOGING: AN ECONOMIC OFFENCE

Tax dodging is a burning problem of the day. It has spread like the cancerous tissues affecting adversely the collection of revenue. A serious threat to the state economy is knocking at the door and naturally mass people are anxious for remedial measures.
Of late, the State Tax Commissioner Mr. Sanjay Kumar Lohia spoke before the news media and it aptly made crystal clear that the extent of evasion of tax has gained the momentum in the state whereby doldrums has been created in the state economy. The honest and necked exposures made by him in relation to the evasion of taxes reflected an ugly picture of the functioning of the check posts vis-à-vis the tax administrative machineries of Assam. The mass people of Assam are constrained to hold that the revenue administration has been getting declined. It is undoubtly well established that the base yards of revenue generation Scheme, namely; the border check post at Sreerampur and Boxirhat, the gateways of Assam, could not be mobilized in a planned and systematic manner. The required infrastructure could not be provided and the qualitative skilled manpower is absent very much. Though the ball entirely rests in the court of the State Govt., it mysteriously maintained a cipher attitude to mend the deficiencies and to do way with the persistent lacunae and odds. Since long floods of advice and suggestions were poured to the State Govt. for acceleration and upgrading the functioning of the check posts, but it reached to the deaf ears and amounted to be a far cry in the wilderness. There is no reaction of the people’s demand and thought provoking advice and suggestions.
One will hardly appreciate that 98 percent of the incoming loaded trucks make their safe and extensive ways into the State without being physically intercepted and checked. Naturally, vehicles with under-weight, mis-classified and unaccounted goods use to enter into Assam without any hindrances and take berth in the trade scenario of Assam abstaining from discharging the statutory obligations and liabilities to pay tax on sale of such goods. Naturally tax-dodging episode spread throughout the state by leaps and bound.
The tax commissioner Mr. Lohia asserted that last year tax evasion amounting Rs. 198 crore was detected but he was not conspicuous in the statement about the out turn derived thereon. Whether it was simply a paper work is not known? The Statement that 40 (forty) crore of evaded taxes were realized by seizing goods vehicles in March, 2008 reflected a horrible picture on the functioning of the Check Post through which the goods vehicles entered into the State of Assam. It has, on the other hand, been noticed that due stress is given for detecting evasion of taxes in Guwahati city, while no effort or endeavour is there in detecting other important commercial places of Assam and such vital task is ignored or neglected. The evaders can safely move the goods vehicle through the North Bank of Brahmaputra without any hindrances and thereby indulge evasion of taxes.

In his own words the tax commissioner is fully aware of the prevailing tax dodging activities, but he is non-committal to dislodge or curb the ugly games played by a section unscrupulous traders, which is of dire necessity at this stage. It can be well construed that tax machinery has been kept paralised jeopardizing the revenue generation exercise.

It is well aware that nullification of Entry Tax Act and reduction of central sale tax have been a dominating factor in the matter of short fall in the matter of collection of revenue, but it is not a denial of fact that scope for recoupment of such pecuniary loss is quite existent by way of making a halt of the tax dodging episode.

The introduction of composite tax payment system contrary to the persistent procedure of tax payment on the sale value of goods has been quite detrimental to the VAT regime exercise. The composite tax system on the production of bricks, on the entire value of works Contract, on the import value of marbles go against the Constitutional themes and guidelines. The concept of tax on sale or purchase of goods has been given a good bye. This measure may end in a fiasco if challenged by any aggrieved or disgruntled traders.

The anticipated curbing of tax evasion by way of erecting composite tax check posts at Sreerampur and Boxirhat will be a long course of action. We can dream, but we should not plunge in deep slumber on such designed activity. The best course of action is to be up and doing in the race.

Tax evasion is an economic offence. It is offensive in the social stature as well. If the tax machineries are cautious and conscious to curb evasion of taxes a serious catastrophe on the state economy will be imminent within a short period of time.


(Mrinal Kanti Chakraborty)
Date – 5/04/2008

Rudra Bhawan
R.G. Baruah Road
10 Lakshmipath
Guwahati-24