Tightening the noose around Fastway Transmission Private limited — having links with the Badal family, Punjab local Government Minister Navjot Singh Sidhu on Thursday laid bare how the “monopolistic” firm evaded taxes Rs running into a whopping Rs 5,000 crore.
Sidhu also declared that he has set a week’s deadline for his Department officials to send notices to all 8000 “erring” service providers, to recover taxes along with the penalties.
Only a day before, the Chief Minister has asked the state Advocate General to go into the details of the matter, and come with the proposed action within 10 days. “Chief Minister has asked me to discuss the entire issue with the AG Atul Nanda,” Sidhu told The Pioneer.
Sidhu added that he had also written to the Chief Minister, as the state Excise and Taxation Department comes under him, regarding the entire tax evasion the day I made disclosures about Fastway in the Vidhan Sabha.
“This is such a massive evasion…In case the State Excise Department detects evasion, the recovery can be made by coordinating with the Centre…I have already written to the Chief Minister…Now, it is upon him to act,” said Sidhu.
As Sidhu has all along been pressing for acting against Fastway, Capt Amarinder was dragging his feet claiming that he was against “witch-hunting”.
Fortifying his case, Sidhu on Thursday brought along a former Central Excise Officer Sl Goyal who exposed how the Fastway went into evading not only the state’s but also the central taxes.
Goyal minced no words to say that the Central Excise Department is dragging its feet in recovering the dues from Fastway. He also hinted that the Enforcement Directorate has the authority to recover the “evaded money” under the provisions of Money laundering Act.
He also alleged that an “honest officer” of Central Excise Department, AS Dhaliwal, was falsely implicated.
Having over 40-year experience, Goyal said that the service tax evasion figure stood at Rs 2600 crore in 2012 when the case was detected by the Central Excise Department, which would have doubled by now, having major share of Punjab.
“The figure of Rs 2600 crore, detected in 2012, would have doubled by now. If the figure was actualised now, the Punjab government would get a major share in terms of entertainment tax,” said Goyal adding that the total tax evasion by now would be over Rs 5000 crore.
Going into the details, Goyal said that a raid was conducted on Fastway premises in 2012, and Company’s all records, from 2008 onwards, were seized which are still lying with the Central Excise Department with no action taken.
“Out of Rs 2,600 crore, the Department sent show cause notices for only Rs 179 crore to Fastway whose ultimate conclusion was not recovery…Thereafter, the rest of the amount became time barred as the financial liability exceeded five years,” he said.
He said that out of 8,000 total cable operators in Punjab, Fastway controlled 6,500 local cable operators, out of which only 150 used to pay taxes, “and the figure has now reached to 325, meaning that only 325 are registered with the Centre”.
Goyal pointed that if any firm managed to evade Central taxes, including service tax, it can easily evade state taxes like entertainment tax, income tax, as the state depended on the central figures.
He accused Fastway of “under-declaring” figure of its subscribers at 1.25 lakh “which comes out to be 20 connections per operator which is funny…The actual figure is 25 lakh subscribers in Punjab”.
If that is not enough, he added that the Fastway strategically evaded service tax on set-top box “by providing it on security on refundable basis, but never refunded any amount…It is actually de-facto sale to evade service tax”. He added that about 45 lakh set-top boxes were imported in Fastway’s name which also raises questions on the actual number of subscribers.
Goyal said that in this tax evasion, the Fastway and cable operators “enter into a conspiracy by singing 21-page agreement in which the operators would collect all funds and give it to Fastway…they deliberately left out who will pay the service tax as Fastway maintained that it was not providing service, and operators maintained that money was handed over to Fastway”.
As per the information under RTI, Rs 25 crore was realised but the Central Excise Department had only details of Rs 11.32 crore. “No information about the Rs 14 crore tax was provided,” he added.
“In 2014, Fastway even got a service tax credit for the invoices amounting to Rs 36 crore but the invoices were deleted from its records,” he added.
Claiming that one lakh people be provided employment if cable mafia is controlled alone, Sidhu said that the financial irregularities committed by the previous Government will be audited.