Skip to main content

IT dept steps up drive against cash abroad

IT dept steps up drive against cash abroad
The incometax (IT) department has established charges against five persons with unaccounted foreign assets of Rs 5,000 crore in the British Virgin Islands (BVI),aCaribbean tax haven.
Investigations are on in more cases.
According to sources in the tax department, these persons are from the gold and diamond export business, and have strong business operations in India as well.
The total undisclosed foreign asset held by them was worth Rs 5,000 crore.
These are among the 612 Indian residents named in the list exposed by The International Consortium of Investigative Journalists (ICIJ) in 2013.
The consortium released information about thousands of secret companies, trusts and funds in offshore hideaways.
According to tax officials, these are “established” cases where they had made offshore investments and secret financial transactions, but it did not reflect in their tax statements.
These people are accused of holding shares/assets in undisclosed BVI companies.
This is the first big move in the investigation in the BVI list where the ITdepartment has found a significant amount of tax evasion by not disclosing their foreign assets.
“We have got material from various sources and tallied it with the profile of the persons and their disclosed assets in India and abroad.
The documents we are in possession with proved the existence of significant unaccounted foreign money,” said a senior ITofficial.
So far, the tax department has conducted its preliminary enquiry into 292 entities, which are incorporated in Mumbai.
Of these, 151 cases were actionable and are still under investigation.
According to sources, prosecution has been initiated in 15 cases and five of these will be heard in the Mumbai special court.
Other than this, the investigation wing of the tax department has sent 19 cases to the assessment wing.
The 19 account for Rs 3,117 crore of undisclosed foreign money.
Apart from this, searches have been conducted on at least seven renowned Mumbaibased individuals.
The search operations had seen several foreign bank accounts which were apparently undisclosed.In the case ofadiamond jewellery exporter,aforeign currency credit transaction of Rs 2,150 crore was detected.
In another case, the assessee was found to be the beneficial owner and held account in UBS AG Singapore.
“Some of the payments from this account were traced to bank accounts of his concerns in India,” said the official cited above.
The databases released by the ICIJ were parts of two larger databases that had been fed for nearly 30 years by two companies: Singaporebased Portcullis TrustNet, and Commonwealth Trust, based in BVI. Both firms specialise in setting up offshore financial structures.
They have helped tens of thousands of people create offshore companies and trusts, as well as hardtotrace bank accounts.
Most of them in the BVI list have signed documents and interacted with the Singapore service provider in the course of incorporating companies in the tax haven, explained official.
Soon after media reports on BVI companies, the Singapore firm which handled the deals had filed a complaint in August 2013 with the British Virgin Islands police about data theft.
In BVI, business companies need to have at least one director, eitheraprivate individual or a corporate entity, which may be resident of BVI or any other jurisdiction.
If the director is notaresident in BVI, the authorities may not be inaposition to provide information of the director, the official said. In suchasituation field authorities of the ITdepartment need to make separate exchange of information request to the country where the director isaresident. The counterparty tax authority cannot intimate the taxpayer as the latter may file an appeal against the supply of information.
Panama investigation hits a wall Meanwhile, income tax officials are unable to makeabreakthrough in the “Panama Papers leaks” case due to lack of information exchange from Panama´s competent authority.
Tax officials raised the concern inameeting held by the Central Board of Direct Taxes on Friday.
The meeting was called to take stock of the offshore matter and related investigations and also on Operation Clean Money.
On the Panama investigation, officials said that the information provided by the foreign authority were basic in nature and were insufficient to trace and prove the case.
The foreign authority has responded to Indian tax authorities that the offshore entities have been struck off and the legal periods of retention of documents has expired.
The Panama authority said they were not inaposition to retrieve and hence they couldn´t provide further details of the persons.Asenior ITofficial had visited Panama last week seeking support and coordination but it was notasuccessful trip, saidasource with direct knowledge.The Panama papers contain an unprecedented amount of information, including more than 11 million documents covering 210,000 companies in 21 offshore jurisdictions.
Each transaction spans different jurisdictions and involved multiple entities and individuals.
Soon after media reports on BVI companies, the Singapore firm which handled the deals had filed a complaint in August 2013 with the British Virgin Islands police about data theft.
The Business Standard, New Delhi, 09th September 2017


Popular posts from this blog

At 18%, GST Rate to be Less Taxing for Most Goods

About 70% of all goods and some consumer durables likely to cost less

A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.

India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.

For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment.

Going by this formulation, about 70% of all goods could fall in the 18% bracket.

The GST Council has finalised a four-tier tax structure of 5%, 12%, 18% and 28% but has left room for the highest slab to be pegged at 40%. A committee of officials will work out the fitment and the council…

Coffee-Toffee, the GST Debate Continues

Hundreds of crores of rupees in the form of taxes ride on the exact categorisation of products Is Parachute hair oil or edible oil? Is KitKat a chocolate or a biscuit? Is a Vicks tablet medicament or confectionery? For the taxpayer and the tax collector, this is much more than an exercise in semantics -hundreds of crores of rupees ride on the exact categorisation.
As the government moves closer to rolling out the goods and services tax (GST) on July 1, many such distinctions are being debated so that no ambiguity remains. Not just that, the government is revisiting old tax cases that were lost over product categorisation, according to people with knowledge of the matter, presumably with a view to making sure that revenue collections can be maximised. “In the past, several tax officers had challenged some of the product categorisations, including those in the retail segment, but lost out in court or at appellate level,“ said one of the persons. “Now we have a chance to go ahead with speci…

Deposit gush:-CA Institute Bats for Special Audit