Official lapses cost State Govt Crores in VAT
Source: The Sangai Express

Imphal, June 11 2011: Due to lapses on the part of officials, the Govt of Manipur has been losing crores of rupees that should be accrued to the State exchequer as Value Added Tax (VAT).

Not a single paise has been received by the State Government as VAT for importing cigarettes and bidis worth Rs 4.65 crores.

This serious loophole in collecting VAT, which is one of the primary sources of generating income for the State Government, was discovered in an independent investigation conducted by The Sangai Express.

These lapses on the part of Taxation and other department officials have resulted in loss of crores of rupees annually which would otherwise be accrued to the State exchequer.

After enforcement of the Manipur Value Added Tax Act 2004, the taxation check post located at Kangpokpi was closed.

In place of it, a new system of checking movement of goods carriers along NH 39 by Taxation office headquarters was started.

Along with launching of the new system, collection of taxes for importing cigarettes and bidis was also stopped.

For instance, between June 2008 and June 2009, cigarettes and bidis worth Rs 4.65 crores were imported to Manipur.

But the State Govt did not receive any amount as VAT from these goods which according to the official estimates should be Rs 58.08 lakhs.

The goods were imported by the dealers without any Way Bill or statutory forms.

For engineering departments too, some officials of the Finance Dept have been deliberately releasing bills for contract works without deducting VAT.

According to rules, VAT for contract works handled by engineering departments should be deducted at source.

But many officials have not been complying with these rules.

All these loopholes in collecting taxes were mentioned explicitly in the annual report of the Comptroller and Auditor General.

On the other hand, IOC Limited (AOD), IOC Limited (MD) and NRL Energy Station, City-I Khurai have not paid the due VAT amount of Rs 1.61 crore till July last year, pointed out the annual audit report.

Moreover, another Rs 11.31 lakhs that should be deducted as VAT for constructing Manipur Bhavans at Shillong, Guwahati and New Delhi were not deducted.

Even though Works Department contended that VAT could not be deducted as these buildings were constructed outside the State, the audit report said that payment of VAT were included in the cost estimates.

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