Punjab Yarn Traders Confront Scrutiny

Yarn traders, who have got exclusion from the payment of entry tax in the state, are under the scanner of the Excise and Taxation Department. A couple of cases have emerged where traders sold imported yarn in the market without processing it in their plants.

Punjab Excise and Taxation Commissioner Anurag Verma asked section functionaries to verify records of all the yarn traders, especially in the city of Ludhiana.

The matter came to hand a few days back when the section carried out a probe in some firms in Ludhiana.

“After availing tax exemption while importing yarn, which is meant to be converted into cloth and then sold as a tax-free item, several dealers misused the exemption and supplied the yarn in the market,” a said senior official.

Department functionaries said Anurag Verma has written to the police to lodge an FIR against Ankit Malhotra, the proprietor of Balaji Sales Corporation, Ludhiana, for registering a wrong undertaking and sworn statement with the section for receiving exemption from the payment of entry tax.

Verma added that the said company obtained exception from the entry tax on yarn imported by him by giving a fake undertaking.

“In the garb of the said exemption, the dealer imported about Rs 6 crore worth of yarn and did not pay any tax on it on the plea that he would convert the yarn into cloth and sell the same as a tax-free item,” he said.

But, during an examination, the departmental functionaries detected that the trader did not even have equipment to make cloth.

“It was found that the dealer has managed to evade tax worth more than Rs 30 lakh,” Verma said.