EXCISE DEPARTMENT UNEARTHS SCAM INVOLVING FAKE C-FORMS WORTH RS 23 CRORE

MANDI GOBINDGARH BASED FIRM CAUSES LOSS TO PUNJAB GOVERNMENT BY SUBMITTING FAKE "C-FORM's"; EXCISE DEPARTMENT WRITES TO POLICE DEPARTMENT TO REGISTER FIR AGAINST FACTORY OWNER
Ludhiana, September 20, 2016: The Excise & Taxation department of the Punjab government has unearthed a scam of VAT evasion in which a company submitted fake C-Form's worth Rs 23 crore with the department. A Mandi Gobindgarh based firm named "World Wide Products Pvt Ltd" had submitted fake "C-FORM's" worth around Rs 23 crore regarding the sale of steel chairs to a Delhi based firm.
Deputy Excise & Taxation Commissioner, Ludhiana, Mr JK Jain informed that World Wide Products Pvt Ltd had supplied steel chairs to some Delhi based firms. He informed that when a company supplies some products to some firm outside the state (which in this case is Delhi), that firm is charged VAT at 2 percent concession rate as per the section 8(4) and rule 12(1) of Central Sales Tax Act 1956. For availing this concession rate, the seller is to submit a C-Form (which in this case were found to be fake). In the absence of C-Form's, the firm has to deposit VAT at 14.3 percent.
The DETC informed that World Wide Products Pvt Ltd had submitted 11 different C-Form's worth Rs 22.53 crore with the department and on the basis of this sale, he deposited VAT at 2 percent. DETC Mr JK Jain informed that the department got suspicious and got the C-Form's submitted by World Wide Products Pvt Ltd scrutinised from Trade & Taxes Department, New Delhi . Assistant Commissioner, Trade and Taxes Department, New Delhi, in his letter no. Ward-62/2016-17/1016 dated September 12, 2016 and letter no. AVATO/W-84/2016-17/1935 dated September 14, 2016 has confirmed that the C-Form's mentioned by World Wide Products Pvt Ltd were never issued by the department to World Wide Products Pvt Ltd.
Had World Wide Products Pvt Ltd submitted genuine C-Form's, they would have been entitled for depositing VAT at 2 percent but as the C-Form's mentioned by them were found to be fake, they would have paid VAT at 14.3 percent. Mr Jain informed that the firm showed VAT at 2 percent in his income tax returns as well, which is illegal. So now, World Wide Products Pvt Ltd has caused a loss of Rs 2.77 crore to the state exchequer by committing fraud with the state government.
DETC Mr JK Jain informed that they have written a letter to the SHO of Mandi Gobindgarh to register an FIR against Mr Jaspal Singh and Mrs Jaswinder Kaur, owners of World Wide Products Pvt Ltd., C-31, 32, 33, Focal Point Industrial Area, Mandi Gobindgarh. He informed that the Excise and Taxation Department would also initiate departmental proceedings against World Wide Products Pvt Ltd. as per law. He warned that no person/company would be allowed to indulge in evasion of VAT or any kind of taxes.