‘Insiders are involved in TIN scam’

The recent revelations about Taxpayer Identification Number (TIN) scam have brought to fore that a few officials of the commercial tax department were involved in the wrongdoing.
As per an estimate by the commercial tax (enforcement) department, tax worth hundreds of thousands of crores of rupees has been evaded.

Commercial tax department additional commissioner Subodh Yadav said it is impossible that tax evasion of this scale could be carried out for years without the collusion of insiders. He said the department’s focus is on exposing the racket and bringing the accused to book.

Yadav said it is only after achieving this aim that the department would look into the role of insiders.

As the investigations continued, commercial tax sleuths cracked two more cases in KG Halli. They found that steel merchants were duping the government by avoiding tax approximately worth Rs1 crore.

Huzaifa Enterprises, owned by T Nisar Ahmed, was found to have carried out illegal transactions to the tune of Rs1.27 crore. MN Steels, owned by Vinod Seth, made illegal transactions to the tune of Rs6.6 crore; Rs34 lakh as tax are still due.

The investigation team found that although Seth owns MN Steel, he availed the TIN in the name of an employee, portraying him as the owner. While the employee drew a monthly salary of Rs21,000, Seth did business of more than `6.6 crore in the employee’s name, without paying tax.

How they do it
A senior police officer who is part of the investigation team said that like Seth, business-owners—in collusion with commercial tax officials—would avail TIN in the name of their employees, make moolah without paying tax and then escape as soon as they get a tip-off about a possible raid from their contact.

Another way businessmen evade tax is by stealing the TIN of petty businessmen to file tax returns and even to claim benefits.

The other trick is that businessmen enter the incorrect TIN thrice while filing returns online. The person’s TIN is blocked when the wrong number is entered thrice. Taking advantage of this, the businessmen would visit the nearest office of the commercial tax department and would get the confidential details of the TIN, which are then misused.

A senior official said only the master of the rules can bend the rules. He said that a few officials of the commercial tax department, who are aware of the nuances of the system, must have informed the wrong-doers about the ways to manipulate TIN.