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<ul><li><keyword id="3658" type="LOCATION" weightage="20" keywordseo="India">India</keyword>’s effort to set up a more efficient tax system us working, with its direct tax-to-GDP ratio at a ten-year high of 5.98% in 2017-18, according to recent data released by the Central Board of Direct Taxes, </li><li>While the average tax revenue from corporate entities has risen by 55% between 2013-14 and 2016-17, individual contributions have increased by 26%. </li><li>The country’s <keyword id="6354751" type="UNKNOWN" weightage="20" keywordseo="income-tax">income tax</keyword> department is now cracking down further on tax evaders, monitoring the offshore deposits and overseas transactions of thousands of Indians under the 2015 anti-black money law. </li></ul> India is getting better at taxes. With a vast informal economy and legacy of tax evasion, India is routinely cited as one of the more difficult places to enforce direct taxation measures. However, that seems to be changing, based on recent <a href="https://www.incometaxindia.gov.in/Documents/Direct%20Tax%20Data/time-series-data-2017-18.pdf">data</a> released by India’s Central Board of Direct Taxes. India’s direct tax-to-GDP ratio has reached a ten-year high of 5.98% in 2017-2018, versus 6.3% in 2007-2008, driven by a higher compliance rate among non-salaried individuals and a widening of the taxpayer base.While the average tax revenue from corporate entities has risen by 55% between 2013-14 and 2016-17, individual contributions have increased by 26%. Further, the number of individuals with an annual income over ₹10 million has surged 68% in the last three years to 81,344. But the Income Tax Department is not resting on the laurels of its recent successes. In fact, it is instead making a renewed push to crack down on tax evasion, according to a report from the Press Trust of India. Its first order of business? Targeting assets stashed by Indian residents abroad. The department is reportedly monitoring the offshore deposits and overseas transactions of thousands of Indians, and has even sent notices to a number of them including high-profile launderers like <a href="https://economictimes.indiatimes.com/news/politics-and-nation/3-tax-notices-under-foreign-black-money-law-slapped-on-nirav-modi-revenue-department/articleshow/65343217.cms">Nirav Modi</a>. Last week, around <a href="https://indianexpress.com/article/india/under-i-t-scanner-7500-indians-who-own-prime-homes-in-dubai-5408287/">7,500 Indians </a>with homes in Dubai were sized up by domestic tax authorities, the Indian Express reported. In the last few months, India has also signed financial intelligence sharing agreements with the governments of Switzerland and Liechtenstein — two popular places where Indians have bank accounts. The Income Tax Department is looking to enforce its recently-passed anti-<keyword id="6356023" type="UNKNOWN" weightage="20" keywordseo="black-money">black money</keyword> law — The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 —. The law provides a framework for dealing with illegal overseas assets like real estate and foreign bank accounts, slapping a 120% penalty on all undisclosed funds in addition to a 10-year jail sentence.

India's plan to get more people to pay taxes is working — and now its cracking down even harder on assets stashed abroad

Chinese smartphone maker <keyword id="874458" type="General" weightage="80" keywordseo="xiaomi" source="Orion">Xiaomi</keyword> on Friday said the ongoing investigations and allegations in <keyword id="3658" type="General" weightage="100" keywordseo="india" source="Orion">India</keyword> could take a long period of time to settle, and the company could receive judgments or enter into "settlements that may adversely affect its operating results or cash flows". The company, which registered around 20 per cent drop in its global sales at $10.31 billion in the June quarter (Q2), said that "it is not practical to quantify" related financial effects (of India probes) "at this stage". "The management assessed the aforesaid matters related to <keyword id="2210169" type="General" weightage="80" keywordseo="xiaomi-india" source="Orion">Xiaomi India</keyword>, taking into consideration opinions from professional advisors and concluded Xiaomi India has valid grounds to respond to the relevant Indian authorities," the group said in its quarterly financial statement. In April, the Enforcement Directorate (ED) had said they seized Rs 5,551.27 crore of Xiaomi India, lying in the bank accounts under the provisions of Foreign Exchange Management Act, in connection with the illegal outward remittances made by the company. Finance Minister Nirmala Sitharaman had informed the Rajya Sabha, in the recent Monsoon session, that five cases of customs duty evasion have been registered against Xiaomi India by the Directorate of Revenue Intelligence (DRI). The company said in its quarterly results that since December 2021, Xiaomi India has been involved in various investigations and notifications initiated by relevant Indian authorities including the Income Tax Department, the Directorate of Revenue Intelligence and the Directorate of Enforcement "in relation to compliance of relevant income tax regulations, custom duties regulations as well as foreign exchange regulations". Xiaomi India further received an order on August 11, "whereby certain of its bank deposits were continued to be restricted, alleging Xiaomi India has inappropriately deducted certain costs and expenses, including purchase costs of mobile phones and royalty fees paid to third parties as well as companies within the Group". The government is looking into cases of alleged tax evasion by three Chinese mobile companies -- OPPO, Vivo India and Xiaomi. A show-cause notice demanding Rs 4,403.88 crore has been served to OPPO Mobiles India Ltd based on an investigation conducted by the DRI. The DRI also detected customs duty evasion of around Rs 2,217 crore by Vivo India. For Chinese enterprises that originally tried to make India an overseas product-processing centre, if it is indeed increasingly difficult and unprofitable to operate in the country, then withdrawing from India is also an available option, state-run Global Times said earlier this month. SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/there-is-a-yawning-gap-between-the-confidence-of-consumers-and-businesses/articleshow/93662752.cms">There is a yawning gap between the confidence of consumers and businesses</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/tiktoks-in-app-browser-on-ios-includes-code-that-can-monitor-your-keystrokes-and-taps/articleshow/93662878.cms">TikTok’s in-app browser on iOS includes code that can monitor your keystrokes and taps</a>

Xiaomi is worried that investigations in India might affect it cash flows, operating results

New Delhi, Dec 26 () GST officials have unearthed a racket involving fake invoicing worth Rs 1,600 crore that resulted in tax evasion of Rs 241 crore, an official release said in a statement on Thursday.
 The racket was busted by the anti-evasion wing of CGST Delhi South Commissionerate.
 The main culprit was arrested and remanded to 10 days of judicial custody by a local court, the release by finance ministry said.
 The alleged racketeer had created several firms on the basis of unauthorised access to identity documents of various persons.
 The ministry said the Commissionerate discovered the case of fake invoicing and GST fraud alongside a "new modus operandi" of defrauding the exchequer by exploiting the facility of refunds given for inverted duty structure.
 "Over 120 entities who are involved in the transactions have come to light so far, involving fake invoicing of Rs 1,600 crore and tax evasion of Rs 241 crore," it added.
 It further said investigations in the case have unearthed a well organised racket of creating bogus firms, issuing fake invoices and bogus e-way bills to generate and encash tax credits.
 The new modus operandi was uncovered by a team of investigators, who worked over many weeks to unearth the maze of companies created across India, the ministry said.
 Incriminating electronic evidence have been recovered from the premises of the accused, it added. NKD NKD ANU
ANU

GST officials unearth Rs 241-cr tax evasion racket

<ul><li><keyword id="45697" type="General" weightage="20" keywordseo="direct-tax" source="Orion">Direct tax</keyword> collection, net of refunds, stood at ₹ 7.45 lakh crore. </li><li>This collection is 52.46 per cent of the total budget estimates of Direct Taxes for 2022-23.</li><li>Refunds amounting to ₹ 1.53 lakh crore have been issued between April 1 and October 8. </li></ul> Direct Tax collection up to October 8 stood at ₹ 8.98 lakh crore, which is 23.8 per cent higher than the gross collection for the corresponding period of last year. Direct tax collection, net of refunds, stood at ₹ 7.45 lakh crore, which is 16.3 per cent higher than the net collection for the corresponding period of last year. This collection is 52.46 per cent of the total budget estimates of Direct Taxes for 2022-23. Refunds amounting to ₹ 1.53 lakh crore have been issued between April 1 and October 8, which are 81 per cent higher than refunds issued during the same period in the preceding year. So far as the growth rate for Corporate Income Tax (<keyword id="6678365" type="General" weightage="80" keywordseo="cit" source="Orion">CIT</keyword>) and <keyword id="35542" type="General" weightage="50" keywordseo="personal-income-tax" source="Orion">Personal Income Tax</keyword> (<keyword id="69256" type="General" weightage="80" keywordseo="pit" source="Orion">PIT</keyword>) in terms of gross revenue collections is concerned, the growth rate for CIT is 16.73 per cent, while that for PIT (including STT) is 32.30 per cent. After adjustment of refunds, the net growth in CIT collections is 16.29 per cent and that in PIT collections is 17.35 per cent. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/apple-watch-detects-pregnancy-before-clinical-test-report/articleshow/94738384.cms">Apple Watch detects pregnancy before clinical test: Report</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/zuckerberg-sets-for-meta-connect-amid-quality-issues-with-vr-project/articleshow/94737865.cms">Zuckerberg sets for 'Meta Connect' amid quality issues with VR project</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/health/news/gambian-cough-syrup-issue-384-people-arrested-after-462-samples-found-spurious/articleshow/94737827.cms">Gambian cough syrup issue: 384 people arrested after 462 samples found spurious</a>

Direct tax collection grows 23.8% to  ₹ 8.98 lakh cr till Oct 8

Bhopal, Jul 3 () GST intelligence officials carried out more than 50 search operations in the last one month at various premises of pan masala and cigarette manufacturers in Indore and detected tax evasion worth over Rs 500 crore, according to an official statement issued on Friday. In order to protect government revenue, six immoveable properties and 14 bank accounts have been provisionally attached as part of the investigation proceedings by the officials of Directorate General of Goods and Services Tax Intelligence (DGGI) here. "Operation Kark to counter illicit sale of pan masala/tobacco/cigarettes, which was initiated on 30th May, has till now detected GST evasion of about Rs 512 crore in last one year (period), while five people have been arrested in this operation," the statement issued by Additional Director General, DGGI, here said. In the last one month period, the officials of central GST intelligence have conducted as many as 53 searches under this operation, it said. The operation has been named ''Kark'' -- considering the high Goods and Services Tax (Kar in Hindi) loss and the reported adverse effects of consuming illicit tobacco not subject to food and safety standards leading to high prevalence of oral cancer (Kark) in India. Officials said that the sleuths part of the searches acted as corona warriors by conducting operation in parts of Indore affected by the deadly coronavirus pandemic. In a recent operation, the GST intelligence officials had detected tax evasion of Rs 105 crore by a cigarette manufacturing firm in Indore in the last one year. As a result of searches conducted in the last week of June, additional evidence suggests that the GST evasion for the period April 2019 to May 2020, by the firm is Rs 270 crore, according to the statement, adding that the amount may rise further. "A search by officials of central GST intelligence was conducted on June 25, 2020 at the premises of the supplier of filters used in (manufacture of) cigarettes (by the Indore based firm)," it said. Investigations revealed that this unit had declared, on invoices, to have provided filters to three dummy firms. Whereas, the filters had been supplied to only one firm, which was searched by the officials, the statement said. One of the proprietors of the dummy firm was found to be an employee of a media organization run by the accused running these illegal units, it said. On June 29, three immovable properties located at Indore and nine bank accounts belonging to the accused and his associate companies involved in GST evasion were provisionally attached, the statement said. "As many as seven people which include directors of the companies (manufacturing cigarettes), transporters and their representatives, key associates in the GST fraud are presently absconding or not appearing under formal summons and are not cooperating with the legal proceedings," the DGGI said. AKV AKV AAR AAR

GST intelligence cracks whip on pan masala manufacturers, detects over Rs 500 cr tax evasion

<ul><li><keyword id="1731609" type="General" weightage="20" keywordseo="oppo" source="Orion">Oppo</keyword> has reportedly come under the scanner of the Directorate of Revenue Intelligence (DRI).</li><li>The DRI has detected customs duty evasion of ₹4,389 crore by Oppo.</li><li>The company has reportedly mis-declared the description of items imported by it.</li></ul>Oppo is the latest Chinese smartphone maker to come under the scanner of Indian agencies. The Directorate of Revenue Intelligence (DRI), the country’s apex anti-smuggling agency has detected customs duty evasion of around ₹4,389 crore. According to a <a href="https://www.pib.gov.in/PressReleasePage.aspx?PRID=1841150">release</a> by the Press Information Bureau, the DRI conducted a search operation at Oppo’s offices in the country and the residences of its key management, the agency recovered incriminating evidence that revealed willful misdeclaration in the description of items imported by the company. The items imported by Oppo were reportedly used for the manufacture of mobile phones in the country. The DRI has claimed that Oppo mis-declared the items to avail ineligible duty exemption benefits. It has claimed that the company availed an exemption of ₹2,981 crore. It looks like DRI has a strong case as the senior management of Oppo and domestic suppliers of the company have accepted the submission of wrongful descriptions to the Customs Authorities to evade payment of customs duty. <cmsannotation type="cmsannotation" annotationid="Oppo sent over ₹1,400 crore to China" comment="subhead" text="Oppo sent over ₹1,400 crore to China">Oppo sent over ₹1,400 crore to China</cmsannotation> Oppo reportedly also remitted a huge amount to China for payment of “Royalty” and “license fee”. The DRI has claimed that Oppo did not add the amount remitted to China in the transaction value of goods imported by them. This allowed the company to further evade customs duty of ₹1,408 crore, bringing the total amount of customs duty evasion to ₹4,389 crore. “After completion of the investigation, a Show Cause Notice has been issued to <keyword id="2034172" type="General" weightage="20" keywordseo="oppo-india" source="Orion">Oppo India</keyword> demanding Customs duty amounting to ₹4,389 crore. The said Notice also proposes relevant penalties on Oppo India, its employees and <keyword id="3513260" type="General" weightage="20" keywordseo="oppo-china" source="Orion">Oppo China</keyword>, under the provisions of the Customs Act, 1962”, the PIB release quoted DRI. <cmsannotation type="cmsannotation" annotationid="Oppo deposits ₹450 crore" comment="subhead" text="Oppo deposits ₹450 crore">Oppo deposits ₹450 crore</cmsannotation> Oppo has reportedly already deposited ₹450 crore as partial differential customs duty short. This means the Chinese smartphone maker will still have to pay ₹3,939 crore in customs duty. “We have a different view on the charges mentioned in the SCN. We believe it's an industry-wide issue many corporates are working on. OPPO India is reviewing the SCN received from DRI, and we are going to reply the notice, presenting our side, and will be working further with the related government departments. OPPO India is a responsible corporate and believes in prudent corporate governance framework. OPPO India will take appropriate steps as may be needed in this regard including any remedies provided under the law," Oppo said in a statement to Business Insider India. <cmsannotation type="cmsannotation" annotationid="Oppo joins Vivo, Xiaomi, and other Chinese smartphone makers" comment="subhead" text="Oppo joins Vivo, Xiaomi, and other Chinese smartphone makers">Oppo joins Vivo, Xiaomi, and other Chinese smartphone makers</cmsannotation> This comes at a time when other Chinese smartphone makers are already under the scanner of Indian agencies for tax evasion, money laundering and other violations. Oppo’s sister company Vivo recently came under the <a href="https://www.businessinsider.in/tech/enterprise/news/ed-has-reportedly-raided-44-locations-of-vivo-and-related-firms-across-the-country/articleshow/92672031.cms">scanner</a> of the Enforcement Directorate after the agency alleged that Vivo <a href="https://www.businessinsider.in/tech/enterprise/news/vivo-reportedly-transferred-nearly-8-billion-to-its-parent-company-in-china/articleshow/92726095.cms">remitted</a> ₹62,476 crore, which is around 50% of its revenue over a five-year period to its parent company in China to avoid paying taxes. The ED is also investigating Xiaomi over <a href="https://www.businessinsider.in/business/news/exclusive-84-of-the-5551-27-crore-seized-from-xiaomi-india-were-remitted-to-qualcomm-group/articleshow/91560593.cms">allegations</a> that the company remitted ₹5,551.27 illegally. Huawei also came under the scanner of the Income Tax department after the company <a href="https://www.businessinsider.in/tech/enterprise/news/chinese-smartphone-maker-huawei-comes-under-the-it-departments-scanner-over-tax-evasion/articleshow/92739828.cms">remitted</a> ₹750 crore as dividends to evade taxes. SEE ALSO: <a>Vivo's offices caught with 2 kilo gold bars after sending ₹62,000 crore back to China – all you need to know on the ED probe</a> <a>After Xiaomi, Vivo comes under the Enforcement Directorate’s scanner</a> <a href="https://www.businessinsider.in/tech/enterprise/news/vivo-reportedly-transferred-nearly-8-billion-to-its-parent-company-in-china/articleshow/92726095.cms">Vivo reportedly transferred nearly $8 billion to its parent company in China</a>

Oppo comes under DRI scanner for alleged customs duty evasion of ₹4,389 crore

Finance Minister <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword>, in his <a href="http://www.businessinsider.in/budget-2016">Budget 2016</a>, announced a <a href="http://www.businessinsider.in/searchresult.cms?query=black+money">black money</a> amnesty window and now the government is making sure it is not misused by tax offenders who are already on the radar of the authorities. 
 
The tax department will make sure that the window is not used by people who have already been red flagged by it. 
 
The Income Declaration Scheme 2016 will also not be available if authorities have prior information about the claimant from another country under tax information-exchange treaties. 
 
This scheme gives a limited-period compliance window from June 1 to September 30 to declare undisclosed income. 
 
READ MORE: <a href="http://www.businessinsider.in/Here-are-15-key-reforms-announced-by-FM-to-transform-India/articleshow/51194448.cms">Here are 15 key reforms announced by FM to transform India</a> 
 
Tax authorities have launched a concerted campaign against evasion that has led to Rs 20,000 crore of <a href="https://www.google.co.in/url?sa=t&amp;rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;cad=rja&amp;uact=8&amp;ved=0ahUKEwjxkO6ehq7LAhUFBo4KHWhrALUQFggbMAA&amp;url=http%3A%2F%2Fwww.businessinsider.in%2FBudget-2016-Black-money-haunts-the-NaMo-Govt%2Farticleshow%2F51140710.cms&amp;usg=AFQjCNGJ8L">undisclosed income</a> being unearthed in the past few years. 
 "For the undisclosed foreign income or assets there is no period of limitation provided under the <keyword id="6356023" type="UNKNOWN" weightage="20" keywordseo="Black-Money">Black Money</keyword> (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. But Income-Tax Act, 1961, contains the provisions of period of limitation, pegged at six years, beyond which tax authorities cannot raise any question," Kuldip Kumar, partner at PwC India, told ET. 
 
(Image: Thinkstock)

Black money: Government to ensure there is no washing away of past sins

<ul><li>Finance Minister Nirmala <keyword id="679937" type="General" weightage="100" keywordseo="sitharaman" source="Orion">Sitharaman</keyword> has revealed that the government is investigating multiple Chinese smartphone makers for tax evasion.</li><li><keyword id="874458" type="General" weightage="20" keywordseo="Xiaomi" source="Orion">Xiaomi</keyword>, <keyword id="1731609" type="General" weightage="20" keywordseo="oppo" source="Orion">Oppo</keyword>, and Vivo have come under the scanner of Indian agencies.</li><li>Here’s everything you need to know about the allegations against Chinese smartphone makers.</li></ul>Chinese smartphone makers occupy a huge share of the Indian market, and companies like Xiaomi, Oppo, and Vivo are among the leading smartphone makers in the country. Over the past few months, Chinese smartphone makers have come under the scanner of the country’s financial watchdog, the Enforcement Directorate (ED), and other agencies. Finance Minister Nirmala Sitharaman has confirmed that the government is investigating Xiaomi, Oppo, and Vivo. This was in response to a question raised by the Bharatiya Janata Party’s Sushil Modi in the Rajya Sabha. <cmsannotation type="cmsannotation" annotationid="Oppo" comment="subhead" text="Oppo">Oppo</cmsannotation> Oppo had come under the <a href="https://www.businessinsider.in/tech/enterprise/news/oppo-comes-under-dri-scanner-for-alleged-customs-duty-evasion-of-4389-crore/articleshow/92848544.cms">scanner</a> of the Directorate of Revenue Intelligence (DRI), the country’s apex anti-smuggling agency for customs duty evasion. "The Department of Revenue Intelligence (DRI) has issued notice to Oppo, the mobile company, for a total customs duty of ₹4,389 crore, and these are on the grounds of misdeclaration of certain goods, leading to a short payment in customs duty. That duty evasion, we think, is about ₹2,981 crores," Finance Minister Nirmala Sitharaman said in the Rajya Sabha. In addition, the government has also claimed that Oppo has under-valued certain imported goods, for which it is liable to pay an additional ₹1,408 core, taking its total liability to ₹4,389 core. "As regards the under-valuation of imported goods for the purpose of payments of customs duty, that we think is an evasion of ₹1,408 crore. So, that is for Oppo. Voluntarily, they have come about to deposit ₹450 crore, much against the total that is running in ₹4,389 crore. That is the demand. They have given only ₹450 crore," Sitharaman added. This means Oppo is still liable to pay ₹3,939 core. In an earlier statement to Business Insider India, Oppo revealed that the company has a different view on the allegations and will work with the government to solve the issue. <cmsannotation type="cmsannotation" annotationid="Xiaomi" comment="subhead" text="Xiaomi">Xiaomi</cmsannotation> Xiaomi India has also been under the scanner of the ED for quite some time. The agency earlier <a href="https://www.businessinsider.in/business/corporates/news/xiaomis-manu-kumar-jain-has-been-reportedly-summoned-by-the-enforcement-directorate/articleshow/90803402.cms">summoned</a> the company’s former India managing director Manu Kumar Jain. Speaking about Xiaomi, Sitharaman added, “Three showcause notices have been issued to them, and their approximate duty liability is about ₹653 crore. For the three show-cause notices which have been issued, they have deposited only ₹46 lakh.” The ED had claimed that Xiaomi India had illegally remitted ₹5,551.27 crore to three foreign entities. Xiaomi had claimed that this amount was actually paid for royalties. A source had earlier <a href="https://www.businessinsider.in/business/news/exclusive-84-of-the-5551-27-crore-seized-from-xiaomi-india-were-remitted-to-qualcomm-group/articleshow/91560593.cms">revealed</a> to Business Insider India that over 80% of these remittances were made to the Qualcomm Group. <cmsannotation type="cmsannotation" annotationid="Vivo" comment="subhead" text="Vivo">Vivo</cmsannotation> Vivo came under the scanner of the ED in July 2022 after the agency raided 44 locations belonging to the company and its associates. The ED had claimed that Vivo had transferred nearly $8 billion to its parent company in China over five years to evade taxes. “The third company is Vivo India, for whom also there is a demand notice given for ₹2,217 crore, against which they have deposited ₹60 crore as a voluntary deposit. Of ₹1,25,000 crore, which is the total sale, Vivo has transferred through these 18 companies a huge amount of funds, and it is believed that Vivo India has, in turn, remitted ₹62,000 crores to its parent company, which is outside India," Sitharaman added. The above numbers reveal that Vivo transferred nearly a half of its revenue to its parent company in China. The investigations began after the Income Tax department <a href="https://www.businessinsider.in/finance/news/income-tax-department-raids-xiaomi-oppo-and-oneplus-offices-in-india/articleshow/88432807.cms">conducted</a> a massive raid in December 2021 at 15 locations of several companies such as Oppo, Xiaomi and OnePlus. SEE ALSO: <a href="https://www.businessinsider.in/tech/enterprise/news/vivo-allegedly-sent-62476-crore-to-china-to-evade-taxes-in-india-heres-everything-you-need-to-know/articleshow/92742439.cms">Vivo's offices caught with 2 kilo gold bars after sending ₹62,000 crore back to China – all you need to know on the ED probe</a> <a href="https://www.businessinsider.in/tech/enterprise/news/oppo-comes-under-dri-scanner-for-alleged-customs-duty-evasion-of-4389-crore/articleshow/92848544.cms">Oppo comes under DRI scanner for alleged customs duty evasion of ₹4,389 crore</a> <a href="https://www.businessinsider.in/business/news/exclusive-84-of-the-5551-27-crore-seized-from-xiaomi-india-were-remitted-to-qualcomm-group/articleshow/91560593.cms">EXCLUSIVE: 84% of the ₹5,551.27 crore of the alleged illegal remittance by Xiaomi India were to the Qualcomm Group</a>

Finance Minister Nirmala Sitharaman reveals government is investigating multiple Chinese smartphone makers for tax evasion

<a href="http://www.businessinsider.in/searchresult.cms?query=tax&amp;sortorder=effectivedate">Taxes</a> are important for smooth functioning of an <a href="http://www.businessinsider.in/searchresult.cms?query=economy&amp;sortorder=effectivedate">economy</a>. They are the main source of federal, state and local government revenues used to several sectors such as infrastructure, health care, education, public transport, etc. 
 
As taxes are important for the country, having a concrete tax system is also important as complex the structure will be, people will find more ways to evade it. 
 
A highly effective tax system is need of the hour for all countries across the globe as overly complicated tax systems are associated with high levels of tax evasion, large informal sectors, more corruption and less investment. 
 
Talking about India, the country has come a long way in weeding out complexities but it still has a long way to go in cost effective tax collection systems. 
 
If we look at ease of tax paying index stands at 157th spot when compared with other 189 nations. 
 
As per a study titled- <a href="http://www.ijettjournal.org/Special%20issue/ICGTETM-2016/ICGTETM_2016_paper_98.pdf">A Comparative Study of Tax Structure of India with respect to other countries</a>- UK and US have way better tax systems. 
 
Here’s where India and other countries stand

India
ranks way below than US, UK and China when it comes to ease of paying taxes. Here’s
where India stands

In order to curb the menace of <keyword id="6355008" type="UNKNOWN" weightage="20" keywordseo="money-laundering">money laundering</keyword> in listed companies, the <keyword id="6355630" type="ORGANIZATION" weightage="20" keywordseo="Securities-and-Exchange-Board-of-India">Securities and Exchange Board of India</keyword> (<keyword id="35210" type="ORGANIZATION" weightage="20" keywordseo="sebi">Sebi</keyword>) has sought the help of various investigative agencies under the <keyword id="47209" type="ORGANIZATION" weightage="20" keywordseo="Finance-Ministry">Finance Ministry</keyword>. 
 
According to a media report, SEBI had recently written to the Finance Ministry, bringing to light evasion of taxes by some companies and the modus operandi used by them. 
 
"The regulator has sought that various investigative agencies including enforcement directorate, financial intelligence unit and the income tax department expedite their investigation in the listed companies' 'tax evasion'," a newspaper quoted a source as saying. 
 SEBI is currently looking into almost 100 listed companies suspected of being involved money laundering. As per the regulator’s estimates, the amount involved in the alleged scam could be as much as Rs 20,000 crore. The <keyword id="6378893" type="UNKNOWN" weightage="20" keywordseo="market-regulator">market regulator</keyword> has barred about 360 entities from the capital market till now. 
 
SEBI’s preliminary probe has revealed that these companies “exist only on paper.” These companies use the exchange platform to convert “black money into white.” "Probe is underway to verify whether these companies and related entities carried out trading among themselves to manipulate share prices, before and after preferential allotment," said a source.

SEBI Seeks Finance Ministry’s Help In Money Laundering Probe

<ul><li>The Goods and Services (GST) collection for October crossed ₹1 trillion with 6.7 million businesses filed their GST returns in FY18. </li><li>The government expects the tax collections to continue rising in the coming months with the onset of the festive season. </li><li>The southern state of Kerala, in particular, exhibited an extraordinary growth of 44% in GST collection followed by the states of Jharkhand, Rajasthan, Uttarakhand and Maharashtra. </li><li>The Indian <keyword id="6355261" type="UNKNOWN" weightage="20" keywordseo="finance-minister">Finance Minister</keyword>, <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword>, attributes the success of GST to lower rates, higher compliance, having only one tax and negligible interference by taxation authorities. </li></ul>India’s biggest indirect tax reform with the implementation of the <keyword id="6359833" type="UNKNOWN" weightage="20" keywordseo="Goods-and-services-tax">Goods and Services Tax</keyword> (GST) only recently completed its first year, and come October, its <a href="https://economictimes.indiatimes.com/news/economy/finance/gst-collections-cross-the-1-lakh-crore-mark-in-october/articleshow/66457681.cms">collections have crossed ₹1 trillion</a>. While the success of the tax is often debated, October’s collections are a 6.6% higher than that of August. India’s Finance Minister, Arun Jaitley, attributes the success of the tax to reduced incidences of tax evasion and a higher degree of compliance. 
 
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 In fact, in October, ₹6.7 million businesses filed their GST returns. The ₹1 trillion threshold was initially breached in April, after which collections have consistently been above ₹900 billion but never quite reaching that mark again. The Indian government expects that this time around tax collections will increase further with the festive season just around the corner. Aside from Diwali, Christmas and New Year’s, it’s also wedding season when consumer demand typically increases. The Ministry of Finance also added that the revenue in October pertains to the sales activities for the month of September. In the coming months, the government is hopeful that the increase in demand for consumption will lead to a rise in revenue at an even faster rate. So much so that it’s confident about meeting the <a href="https://www.livemint.com/Companies/209TWMGXqbauGBcvFmiv6K/GST-collection-rises-in-September-still-short-of-Rs-1-trill.html">fiscal deficit of 3.3%</a> of its <keyword id="6354971" type="DEFINITION" weightage="20" keywordseo="gross-domestic-product">Gross Domestic Product</keyword> (GDP). State by state Kerala tops the list of ‘extraordinary growth’ with respect to its GST collection with a 44% contribution to total tax deposits across India. The southern state was followed by Jharkhand, Rajasthan, Uttarakhand and Maharashtra contributing 20%, 14%, 13% and 11% to the total tax collection, respectively. The<a href="https://economictimes.indiatimes.com/news/economy/finance/gst-collections-cross-the-1-lakh-crore-mark-in-october/articleshow/66457681.cms"> total gross GST</a> revenue collection in October constitutes Central GST of ₹164.64 billion, state GST of ₹228.26 billion, IGST of ₹534.19 billion and cess amounting to ₹80 billion . While the tax regime has yielded positive results for a select few states — Mizoram, Arunachal, Manipur, Nagaland, Sikkim and Andhra Pradesh — others have faced a<a href="https://indianexpress.com/article/business/economy/gst-collections-cross-in-october-5429010/"> shortfall in revenue</a> ranging from a mere 3% to a whopping 42% in states like Punjab and Himachal Pradesh. The GST system in India may have avoided inflation from setting in and widened the tax base, but basic obstacles like registration and compliance are still in play.

India’s biggest tax reform hits ₹1 trillion in October, expects collections to rise with the festive season rolling in

Bhopal, Jun 22 () GST intelligence officials have detected tax evasion of Rs 105 crore by a cigarette manufacturing firm in Indore in the last one year, according to an official statement issued on Monday. The officials of the Directorate General of GST Intelligence (DGGI) here had conducted searches at the firm's premises last week that revealed that a secret exit had been set up on the rear side of the factory through which unaccounted raw materials were brought in and finished goods cleared, it said explaining the modus operandi. It was also found that the generator sets used for operating machines were manipulated to suppress production, the probe agency said. "Investigations conducted by the DGGI has unearthed a major tax/ duty/ cess evasion estimated to be about Rs 105 crore only for the period since April, 2019 till May, 2020," said the statement issued by the Additional Director General, DGGI Bhopal. Similar evasion is suspected to have been resorted to by the unit during remainder of GST and erstwhile central excise periods also, it said. "Hence the total revenue evasion, which would be clear only after completion of investigation, is suspected to be multiple times higher," the DGGI said. The financial investigations into the dealings of the mastermind, who was recently arrested by the DGGI in another case, has indicated that he had opened a media house in which he declared his circulation of newspaper copies at 1.2-1.5 lakh per day while actually circulation was only 4,000-6,000 per day, it said. "Thus, the mastermind of this fraud laundered huge amounts of illicit wealth (in cash) earned from illicit pan masala/ cigarettes business by declaring fraudulent sale of newspapers and also booked fictitious advertising incomes," the statement said. The DGGI said that, from the interrogation of the factory supervisor, accountant and other staff, it is estimated that less than five per cent of the production was accounted for since last many years. "Even for the accounted production, the major buyers (of these five per cent sale) have been found to be fictitious," it said. On June 19, the DGGI officials were also successful in locating one of the clandestine and unregistered godown used by the tax evaders to conceal the packing material containing specific brands of cigarettes such as K10 and A 10, the statement said. "Investigations have revealed that the seized packing material is sufficient to pack 5000 cartons (each carton containing 12,000 cigarettes) with estimated printed MRP of Rs 27 crore," it said. However, it is suspected that there may be a large number of other such clandestine and undeclared godowns in and around Indore which DGGI officials are attempting to locate, the statement said. The supplier of these two brands of packing materials has confirmed the unaccounted supply of about 1,500 cartons per month, it added. As part of 'Operation Kark', the DGGI Bhopal officials had conducted searches in the premises of over a number of pan masala/ tobacco dealers and distributors from June 9 to 12th, leading to huge seizures of clandestinely stocked non-GST paid pan masala/tobacco and detection of estimated Goods and Services Tax (GST) evasion of Rs 400 crore. The operation has been named 'Kark' -- considering the high Goods and Services Tax (Kar in Hindi) loss and the reported adverse effects of consuming illicit tobacco not subject to food and safety standards leading to high prevalence of oral cancer (Kark) in India. One of the masterminds and financial beneficiaries in this case was arrested from Mumbai on June 15. Further investigations revealed that he was involved in manufacture and supply of cigarettes from a unit in Indore. Data analysis by the DGGI officials indicated that this unit had paid a GST of only Rs 2.09 crore and Rs 1.46 crore in last two financial years, respectively. Based on further analysis and information collected, searches were conducted at five premises connected with this unit last week, the statement said. "The tax evasion syndicate in this case involves directors of the company, transporters, supporting manufacturers and raw material suppliers. Number of these persons are presently absconding and have not joined DGGI investigations," it said. AKV SMN

GST intelligence officials detect Rs 105 crore tax evasion by Indore-based cigarette manufacturer

The name of India’s leading industrialist <keyword id="253799" type="PERSON" weightage="80" keywordseo="Yash-Birla">Yash Birla</keyword> is among the Indians with <keyword id="43603" type="CITY" weightage="80" keywordseo="Swiss-Bank">Swiss bank</keyword> accounts whose names have been publicized by Switzerland's official gazette with reference to the current tax enquiries against them in India. 
 
There are five other names - Syed Mohamed Masood, Chaud Kauser Mohamed Masood, Gurjit Singh Kochar, Sneh Lata Sawhney, and Sangita Sawhney. 
 The Masoods are being investigated for a huge Mumbai based ponzi scheme through <keyword id="2870116" type="UNKNOWN" weightage="60" keywordseo="City-Limousines">City Limousines</keyword>. Syed Masood’s accounts were already frozen years ago after a request from the <keyword id="6357808" type="ORGANIZATION" weightage="60" keywordseo="Enforcement-Directorate">Enforcement Directorate</keyword>. Fresh details about him and about Chaud Kauser Masood have been requested by the Indian authorities. 
 
The accused can file an appeal to the Swiss Federal Administrative Court within 30 days, asking them not to share their details with Indian authorities. 
 
In case of Birla and Sharma, whose details have already been shared, the announcement also mentions their Indian addresses. 
 
Indians has been pushing Swiss authorities for long to share details on account holders suspected of tax evasion in India. 
 
The current announcement comes in light of the new black money law passed by the Indian Parliament. The convicted will now face up to ten years in jail and a penalty of 90 per cent of funds in addition to 30 per cent tax levy. However, there is a relaxation for first time offenders, where the person can come clean by paying 30% tax and 30% penalty. Hope this doesn’t let many a Birla slip through. 
 
(Image credit: Indiawires)

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