In one of the largest cases related to revenue fraud, the Department of Revenue Investigation on Thursday filed a case against 15 individuals at the Kathmandu District Court on the charge of evading Rs 2.98 billion in taxes by producing and selling fake Value Added Tax bills.

This is the second case filed by the department in the past three and a half months.

On March 3, the department had filed a similar case against 24 individuals for evading Rs1.75 billion in taxes through fake VAT bills.

“The persons accused in the latest case are not part of the former racket, though their modus operandi was the same,” Dirgha Raj Mainali, director general of the department, told the Post.

Among the 15 accused, the department had arrested Gopal Prasad Bhattarai, who is currently in 45 days investigative custody.

Preliminary investigation has found that Bhattarai, in partnership with Rimbar Dhowj Karki, had registered various firms under the names of Binod Dhamala, Santosh Kumar Karki, Megha Bahadur Shrestha, Dhan Bahadur Bhomjan, Bharat Bahadur Dumjan, Bimal Putuwar, Narayan Koirala (Damai) and Parbati Suchikar to run the fake VAT bill racket.

“Karki is at large while the eight people under whose names the firms were registered didn’t come in contact of the department despite efforts to contact them through police mobilisation and a public notice,” said Mainali.

The department has also filed a case against tax assistants Lalitraj Kandangwa and Gauri Mainali, and auditors Jagannath Gurung, Sharan Bahadur Khadka and Tanka Nath Nepal for aiding and abetting the racketeers.

The department has sought confiscation of dodged tax amount, fine equalling double the amount of tax dodged and three years jail terms for Bhattarai and Karki and the eight people under whose names the firms were registered.

In the case of the accused tax assistants and auditors, the department has demanded half of the punishment prescribed to the 10 main accused.

Meanwhile, the department is also conducting a separate investigation into the firms who have been evading taxes using fake VAT bills purchased from racketeers.

“Around 900 firms have been accused of buying fake VAT bills. We are currently investigating into 50 firms,” Mainali said.

The department officials believe that the amount of dodged tax in the latest scandal could be much higher than the 2010-11 tax evasion case once the amount of evaded tax by the purchasers of the fake VAT bills is determined.

In 2010-11, the tax authorities had decided to collect Rs6.69 billion from 518 firms. The incident had made national headlines due to the involvement of noted industrialists and businessmen.

The department officials said they were still in early stages of their investigation to know if noted businesspersons and firms are involved this time.

The latest fake VAT bill scandal once again showed how pervasive the use of fake VAT bills is in the market.

Surendra Pandey, who was the finance minister at the time of the 2010-11 fake VAT bill scandal, told the Post that such practice flourished as a result of collusion among racketeers, businessmen, auditors and government staff.

“The government must be decisive in taking action against such people. The only option for the government is to take a strong action to preclude tax evasion crime,” Pandey said.