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Black money: I- T dept begins action against mining companies

In a bid to attack domestic black money, the government has set sights on India’s vast mining sector. The Central Board of Direct Taxes ( CBDT) under the finance ministry has instructed income tax ( I- T) officials to scrutinise production details and tax returns filed by the companies engaged in mining activities and take appropriate action in case of any discrepancy.
“The government is quite serious about curbing the black money menace, be it stashed abroad or domestically.
To curtail domestic unaccounted income, we’ve identified specific target sectors.
Mining is one such sector where we’ve discovered serious instances of tax evasion,” said a government official.
The government has discovered significant differences in the annual returns filed by mining firms with the Indian Bureau of Mines ( IBM) and the companies’ income tax returns.

In an instruction issued to all chief commissioners as well as the director- general, CBDT said: “ While scrutinising cases of entities engaged in the business of mining, the annual returns filed with IBM by the respective assessees should be invariably obtained and compared with the details submitted to the I- T department to ascertain whether any suppression of production and discrepancy in stock exists and necessary action as per the provision of law may be taken.” The issue was also flagged by the government- constituted MB Shah Commission of enquiry to probe illegal iron and manganese ore mining. It had pointed out there was a difference of 53.41 million tonnes between the iron ore production in the figures of IBM and state governments. “The follow- up enquiries to the Shah Commission of enquiry showed that in some cases, there were significant differences in the production and closing stock figures that were reported in the annual return to IBM, against those reported in the I- T return,” said the official quoted above.

CBDT has instructed I- T officialstotakenoteofsuchcases and take necessary action. “The government’s actions are in sync with the policy and legislation it has brought in, underlining that those with unaccounted cash will not be spared. After targeting black money overseas, it is concentrating within the country through various measures. It is a big positive,” said Rakesh Nangia, managing partner, Nangia & Co.

The government will soon make it mandatory to furnish permanent account number for cash transactions over a certain limit. In a recent Facebook post, Finance Minister Arun Jaitley had said a bulk of black money was still within India and that there was a need to change the national attitude so that plastic currency becomes the norm and cash an exception. “ The government is working with various authorities to incentivise this change,” he had said.

This comes after the government targeted black money stashed abroad by providing athree- month compliance window that ended on September 30 and saw declarations worth just Rs.4,147 crore.

However, the government has warned of stringent action on account of improved information exchange provisions with various countries.

DIG OUT GRAFT

|The govt has discovered significant differences in the annual returns filed by mining firms with the Indian Bureau of Mines and the companies’ income tax returns |The issue was also flagged by the govt- constituted MB Shah Commission of enquiry to probe illegal iron and manganese ore mining |This comes after the government targeted black money stashed abroad by providing athree- month compliance window that ended on September 30 and saw declarations worth just Rs.4,147 crore

Business Standard, New Delhi, 19 October 2015

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