The Commission for Investigation of Abuse of Authority filed a second case against the officials of the Tax Exemption Commission formed in 2071 BS. A case has been filed against Chairman Lumbadhwaj Mahat, Member Umesh Dhakal, and Director General of the Inland Revenue Department Chudamani Sharma, who acted as member secretary, on the charge of leaking Rs.
This is the second case filed by the authorities against these three officials. Last time, Rs. 3.34 billion was demanded from each official and double the fine was demanded. There is a legal provision to demand a double fine from Vigo if he is accused of revenue leakage. If convicted, they could face up to eight to 10 years in prison, according to authorities.
The government had formed a commission in 2071 BS to change the long-pending tax. According to the commission's mandate, he could only manage taxes by looking at files of a limited nature. (H. Box) But the authorities have filed a case alleging tax evasion on the issue of not having jurisdiction beyond that scope.
A spokesperson for the authority, Narayan Prasad Risal, told Online Khabar that the commission has filed a case in a special court as three officials were involved in the illegal tax evasion. He said that after the second case, the investigation of the complaint of irregularities of the tax evasion commission has been completed.
The Commission for Investigation of Abuse of Authority (CIAA) launched an investigation after the Auditor General's Office prepared a report alleging arbitrary tax evasion and loss to the state exchequer. The authority, which had filed the first corruption case on July 1, 2074 BS, has filed the second case after investigating the remaining files.
For the first time, 45 files were investigated, but now 76 files have been investigated and another case has been filed. According to Narayan Risal, spokesperson of the authority, the investigation on all the files of the tax evasion commission has been completed after the second case was filed. According to the charge sheet filed by the authority in the special court on July 26, 10 charges have been leveled against the officials of the Tax Exemption Commission. The allegations are as follows:
Allegation-1: Exceeding the jurisdiction
The Commission for Investigation of Abuse of Authority has accused the officials of the Tax Deduction Commission of exceeding the mandate and jurisdiction given by the government. The case has been filed saying that tax evasion should be done only based on revenue arrears up to the fiscal year 2069/70.
Everest Insurance had to pay Rs 14 million in income tax for the fiscal year 66/67. On July 8, 2071, 4.14 million VAT was to be paid. The Tax Exemption Commission has disbursed Rs.
Universal Cafe & Banquet had applied for tax exemption on April 12, 2072 BS. In his case, the tax administration had assessed the final tax of Rs. Two months after that, the commission signed an agreement worth Rs. According to the charge sheet, "the commission has reached an agreement without giving any application to the taxpayer. It is alleged that revenue leakage of Rs 13.1 million has taken place due to the expired agreement with Citizens Bank International. Other details of the loss to the exchequer due to tax evasion are as follows:
| Exceeding the jurisdiction | |
|---|---|
| Company name | Loss of state treasury |
| Vikas Floor Mill | 1.3 million |
| Himalayan Dairy Products | 24 lakh 58 thousand |
Charge 2: Looking at expired files
According to the jurisdiction of the Tax Exemption Commission, he will be able to look into the issue of tax assessment only till mid-July 2071 BS. Officials of the commission have been accused of tax evasion after considering the issue of tax assessment after 2070 BS. The files thus viewed are as follows-
| Viewing expired files | |
|---|---|
| Company name | Loss of state treasury |
| Prime Only Industries | 4 lakh 9 thousand |
| New Star Lobby Furniture | 71 thousand |
| Himalayan Dairy Products | 28 lakh 87 thousand |
| Bottlers Nepal | 49 lakh 43 thousand |
Charge 3: A tax deduction for those involved in fake VAT bills
In the mandate of the commission officials, the taxpayers who used fake tax invoices did not have the right to evade taxes. The tax commission exempted the tax-evading companies from the VAT collected by making fake tax invoices. His details are as follows:
The Global Business Firm had collected VAT while supplying goods to various units of the police and the Armed Police Force. However, it was found that the tax was evaded by not including the bill in the income statement and VAT statement. The Tax Exemption Commission has not stopped giving concessions to the companies that have not paid the amount of VAT to the state by giving fake invoices to the government. The authority claims that a total of Rs 361.6 million was leaked from the company's tax, including Rs 283 million in income tax and Rs 81.3 million in VAT.
| Tax deduction for those involved in fake VAT bills | |
|---|---|
| Company name | Loss of state treasury |
| Auto in Pvt | 2 crore 28 lakh |
| Is Trading | 24 lakh 81 thousand |
| Nepal Oil House | 12 lakh 32 thousand |
| Carex Pharmaceuticals | 1 crore 81 lakh |
| Danphe Dhukuchu Suryachandra JV | 24 lakh 88 thousand |
| Apex Dhukuchu JV | 35 lakh 38 thousand |
| Om sai Construction | 78 lakh |
| Mine Apex Dhulikhel JV | 55 lakh 94 thousand |
Charge 4: Tax evasion in case of non-demand
According to the procedure, taxpayers who have not paid tax for a long time should have applied only for the tax exemption. And the registration should have been allowed only after the commission decided the jurisdiction after looking at the application. However, the charge sheet of the authority states that some of the taxpayers have evaded the tax for a period longer than the amount demanded in the application and for the amount demanded.
Anita Electrical and Mechanical Company had applied for income tax exemption of Rs 31.4 million for 2059/50 and only Rs 8.63 million for VAT. However, the Tax Exemption Commission waived the tax for a longer period, resulting in a loss of Rs 2.916 million to the state exchequer.
| Tax evasion in case of non-demand | |
|---|---|
| Company name | Loss of state treasury |
| Annapurna Galvanizing Industries | 1 lakh 15 thousand rupees |
| Vaiva Construction | 39 lakh 49 thousand rupees |
| Tamang Construction | 6 lakh 40 thousand rupees |
| The Kanchenjunga PS Shankarmali JV | 1 million 79 thousand rupees |
| Rara Store | 64 lakh 77 thousand rupees |
| Kalika Nepal Construction JV | 1 lakh 42 thousand rupees |
| Ramchandra Construction Service | 37 thousand rupees |
| SV Construction Services | 2 lakh 20 thousand rupees |
| Intel Institute | 4 lakh 93 thousand rupees |
| Shyam Commercial Traders | 6 lakh 6 thousand rupees |
| New Acharya Fancy Store | 77 thousand rupees |
| Lumbini Dhulikhel JV | 4 lakh 55 thousand rupees |
| Kalika Kanchenjunga Swachchhand JV | 2 lakh 44 thousand rupees |
| Dhulikhel Pushpanjali JV | 1 lakh 6 thousand rupees |
| Baba Paints | 86 thousand rupees |
| Chitwan Koi Nepal Pvt | 59 lakh 11 thousand rupees |
| Nepal Tent and Tarpaulin Pvt | 1 lakh 33 thousand rupees |
| Nikhil Food Suppliers | 1 lakh 32 thousand rupees |
| Swastik Impex | 72 thousand rupees |
Charge-5: Tax deduction of companies that have committed to pay
During the investigation, the authorities found that the taxpayer had promised to pay but had also refused to pay. Gavin Wire Industries had to pay 1.698 million. He also submitted details of Rs 2.94 million to the tax administration saying that he would pay the tax himself. 17,000 interest was also added to that. He had also paid 1.26 million. But later, the Tax Exemption Commission waived the remaining amount, resulting in a loss of Rs 798,000. Other companies that get such concessions are as follows:
| Tax deduction for companies that have committed to pay | |
|---|---|
| Company name | Loss of state treasury |
| Vaiva Bhairav Construction JV | 1 crore 77 lakhs |
| Everest Ghimire construction service | 22 lakh 88 thousand rupees |
| Shubhshree Jagdamba Cement Mill | 15 lakh 89 thousand rupees |
| Dokaniya suppliers | 33 lakh 60 thousand rupees |
| Michiko & Company | 7 lakh 81 thousand rupees |
| mm construction | 24 lakh 57 thousand rupees |
| Golden Good Kharidhunga Changmila JV | 19 thousand rupees |
| National Development Apprentice Taksar Shankarmali Bandhan Bagmati JV | 4 lakh 85 thousand rupees |
| Swachchhand Golden Good Powertech JV | 17 lakh 22 thousand rupees |
| Floor construction service | 13 lakh 43 thousand rupees |
| Dhulikhel Pushpanjali JV | 1 lakh 6 thousand rupees |
Charge-6: Tax exemption even on fake accounts
There was no provision for tax evasion in the work order of the taxpayer who kept fake accounts. Tax evasion is not within the jurisdiction of the Commission as fake accounts are kept to evade revenue like fake VAT bills. But the commission also waived taxes on them.
| Tax exemption even on fake accounts | |
|---|---|
| Company name | Loss of state treasury |
| Dampa Enterprises | 3 lakh 21 thousand |
| Nepal Shalimar Cement | 1 crore 45 lakh |
| Crystal Party Palace | 69 lakh 87 thousand |
| Life Care Prince Diagnosis Center | 13.1 million |
| Deepak Gautam & Co. | 8 lakh 45 thousand |
| Mahavir Hardware and Suppliers | 12 lakh 82 thousand |
| Neoteric Nepal Pvt | 57 thousand |
| Pawan Kumar Enterprises | 7 lakh 12 thousand |
| Anil Enterprises | 6 lakh 43 thousand |
| shakti sales traders | 3 lakh 89 thousand |
| Progression IT Solutions | 29 lakh 92 thousand |
| Jaybaba Shrestha Civil History Sudha Arvind JV | 13 lakh 69 thousand |
| Jamil New Delhi Infrastructure Pvt | 1 crore 21 lakh |
| Taleju Bhavani Trade Center | 82 lakh 64 thousand |
| Laserson Energy Pvt | 32 lakh 50 thousand |
Charge-7: Even the tax paid is refunded
Taxes paid will not be refunded from the state treasury under any circumstances. However, it was found that the tax paid by the Tax Exemption Commission has been deducted and the calculation has been done in such a way that the tax to be paid in the coming days will be matched. Thus, there was a loss in the state exchequer due to tax exemption of the following companies:
| Even the tax paid is refunded | |
|---|---|
| Company name | Loss of state treasury |
| Kalika Kancharam Construction JV | 3 lakh 30 thousand |
| Atmaram Pawankumar | 9 lakh 20 thousand |
| Deepak Gautam & Co. | 3 lakh 75 thousand |
| Satya Shree Enterprises | 33 thousand |
| Om Impex | 3 lakh 84 thousand |
| Jamil New Delhi Infrastructure Pvt | 1 lakh 51 thousand |
Charge 8: Convenience to traders by obstructing tax assessment
The tax officer determines the revised tax without being satisfied with the details submitted by the taxpayer. The commission also waived the tax by interfering in such a process. For example, EVCO International Pvt. Ltd. would have to pay VAT, interest, and fees in the amount of Rs. 189 million. The large taxpayer's office had assessed VAT of Rs. 408.4 million for the fiscal year 2066/67. He had also filed a case in the high court against it. But the Tax Exemption Commission exempted the tax to Rs. 1 lakh. The authority has accused the three officials of leaking revenue of Rs 408.4 million for entering into the issue of lack of jurisdiction.
Charge 9: Tax exemption from an unsigned petition
According to the authority, the jurisdiction of the tax evasion commission will not be created automatically but the process will move forward after the taxpayers apply. Officials had taken action on the unsold application only after the taxpayer himself or the authorized person signed the application. The authority claims that Navyug Media Solutions has lost Rs 514,000 to the state exchequer by taking Rs 20,000 out of Rs 534,000.
Charge-10: Tax exemption even in cases that have reached the highest
The jurisdiction of the tax evasion commission would not have been attracted even if the tax administration tried to go to the top without being satisfied with the decision of the revenue tribunal. But the commission intervened. The revenue tribunal ruled that Gyan Enterprises had to pay Rs 2.46 million. Unsatisfied, the big taxpayer's office tried to go to the Supreme Court for an appeal. However, the Tax Exemption Commission demanded a complete file from the big taxpayer's office and prevented it from going to the top. Ignoring the letter sent by the big taxpayer's office saying that it should go to the apex court, it collected Rs 110,000 and caused a loss of Rs 2.35 million to the state exchequer.
What was the mandate?
Income Tax Acts in force in 2058 and earlier,
The Value Added Act 2052 and the acts that replaced it before,
Excise Act 2058, Alcohol Act 2031, and earlier Excise and Alcohol Acts
According to the Customs Act 2064 and the previous Customs Act, the tax has been assessed till 2069/70 and the matter under consideration in the court or anybody without being satisfied with it,
Subject to the court or other body not satisfied with the education service fee and health-related tax during the period of 2069/70, the tax fixed by mid-July 2071,
The amount to be filed in one revenue title is mistakenly in another title,
Issues with arrears of revenue by 2069/70, but should have been settled by mid-July 2071,
