India Uncovers INR 136 Billion of Evaded Taxes

April 11, 2012 Taxation in India

Tax Evasion Uncovered in IndiaNEW DELHI – Recent investigations by national tax authorities have proven that businesses across India evaded billions in taxes last year, with one particular group of related entities neglecting to pay nearly INR 8 billion in one year alone.

On April 10th the Ministry of Finance of India released a statement revealing that investigations conducted over the first 11 month of the 2011 – 2012 fiscal year by officials of the Central Board of Customs and Excise (CBEC) and the Central Excise Intelligence (CEI) uncovered evidence pointing to evasion of payment of INR 102.86 billion of service taxes and INR 33.3 billion in excise duties.

According to the Ministry of Finance, so far approximately INR 11.8 billion of the evaded service taxes have been recovered, and the amount of already recovered excise duties has reached INR 9.7 billion.

The tax authorities of India revealed that the success of the investigations was based on whistle blowing and collection of extensive intelligence information. As a particular example, the CEI noted that in March it had received information regarding the “Skylark” group of companies, which provides security and labor services across the country.

Searches of offices belonging to companies in the Skylark group revealed INR 7.75 million of unaccounted currency and “voluminous incriminating documents” pointing to the tax evasion. Investigations are now being conducted by tax authorities of all business related to Skylark, and inspections are being carried out on the education institutes also run by the group.

Photo by nehasingh7