Tax department takes step to find fake VAT bill purchasersInland Revenue Department has instructed its offices across the country to identify firms that have purchased fake VAT bills.
Inland Revenue Department has instructed its offices across the country to identify firms that have purchased fake VAT bills.
The tax department’s move comes after the Department of Revenue Investigation filed a case at the Kathmandu District Court on March 3 against 24 individuals associated with 24 firms on the charge of evading taxes amounting to Rs1.75 billion by producing and issuing fake VAT bills.
The Inland Revenue Department (IRD) said the move would be useful for itself and for the Department of Revenue Investigation (DRI) in conducting further investigation into the matter.
“Right after the DRI filed the case, we wrote to our tax offices across the country to identify the firms who had purchased the fake VAT bills and to check whether they used them for evading taxes,” said IRD spokesperson Yagya Prasad Dhungel.
The IRD sought details of firms purchasing fake VAT bills amid complaints from DRI that the former failed to trace the people involved in the latest
VAT bill scandal.
At a press meet on March 5, the DRI Director General Dirgha Raj Mainali had said the IRD had failed to notice the avtivities of the 24 firms that conducted transactions worth millions of rupees in a month, while failing to conduct even one transaction in the following month. IRD officials defended themselves saying that they could not trace the activities of the 24 companies because they did not have the software to track the activities of new companies. “We only monitor firms that have been flagged for suspicious activities,” Dhungel said.
The IRD put the 24 firms under the category of ‘suspicious firms’ after the scandal was exposed. “Besides monitoring these firms, we will also see whether they had tax liability in the past before purchasing the fake VAT bills,” said Dhungel.
According to the DRI, it has already identified around 500 firms that purchased the fake VAT bills from around 50 firms established to produce and sell fake receipts.