Black money trail helps uncover Rs50,000-cr indirect tax evasion

11 May 2016


The government on Tuesday said it has uncovered indirect tax evasion of Rs50,000 crore and undisclosed income of Rs21,000 crore in the last two years through enhanced surveillance and enforcement.

"Enhanced enforcement measures have resulted in unearthing of tax evasion of approximately Rs50,000 crore of indirect taxes and undisclosed income of Rs21,000 crore," a finance ministry statement said.

"The value of goods seized on account of smuggling activities has increased to Rs3,963 crore in the last two years (32 per cent increase over corresponding two previous years).

"Prosecution has been launched in 1,466 cases as against 1,169 cases in the previous two years (25 per cent increase)," it said.

Listing steps taken to curb black money within and outside India, the finance ministry statement said, a new Black Money Act with strict penalty provisions had been enacted and a Special Investigation Team (SIT) under former Supreme Court judge MB Shah was constituted to probe the black money trail.

"Many recommendations of SIT have been implemented since then," it said.

A total of Rs4,147 crore of undisclosed wealth was declared during the 90-day foreign black money compliance window that ended 30 September 2015. At 60 per cent (30 per cent tax and 30 per cent penalty), the government got a net tax of Rs2,500 crore from the declarations.

A new Income Disclosure Scheme has been opened to facilitate disclosure by those holding undeclared assets by paying a total tax and penalty of 45 per cent, it added.

The government has also made amendments to the Prevention of Money Laundering Act (PMLA) to enable attachment and confiscation of equivalent assets in India where the asset located abroad cannot be forfeited.

Section 132 of the Customs Act, which deals with offences relating to false declaration or documents in the transaction of any business, has been made a predicate offence under PMLA to curb trade-based money-laundering.

"The offence of wilful attempt to evade any tax, penalty or interest referred to in section 51 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 has been made a scheduled offence under PMLA," the statement said.

The Foreign Exchange Management Act (FEMA), 1999 has also been amended to provide for seizure and confiscation of value equivalent located in India, in case a person is found to have acquired any foreign exchange, foreign security or immovable property, situated outside India, in contravention of FEMA.

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