180 mining firms under scanner for evading VAT

Commercial Taxes dept to approach SC for documents seized by CBI

As many as 180 mining companies have come under the scanner of the Commercial Taxes department in the State for evading Value Added Tax (VAT). Located in the three major mining districts of Bellary, Tumkur and Chitradurga, the companies have allegedly avoided paying taxes for dealing in extraction and export of iron ore for many years.

As per the Commercial Tax department rules, all companies which deal in mining have to register themselves as dealers and pay VAT.

 However, most of these mining companies have failed to file their assessments for the years 2008-09 to 2013-14.

It is said that the department has issued notices to most of these companies. While some have responded, most are yet to justify their reasons for not paying VAT.

Commercial Tax department commissioner Ajay Seth told Deccan Herald that his department was pursuing files and documents of companies against which criminal charges have been filed by the CBI and Lokayukta.

These companies figure in the Lokayukta report on illegal mining.“We have identified companies against which action has to be initiated on priority. We tried pursuing the matter with the Lokayukta, who in turn directed us to the Central Bureau of Investigation (CBI), which is investigating these companies. The Lokayukta transferred the files to the Central agency when the mining cases were handed to the CBI by the Supreme Court,” said Seth.

On September 8, Seth wrote to the CBI, seeking photocopies of files and documents pertaining to companies, which the agency had seized during raids.

However, the CBI stated that most documents pertaining to companies involved in illegal mining had been deposited with the Supreme Court. The department is now likely to approach the apex court, seeking access to the documents. The department has also sought copies of documents available with the Department of Mines and Geology (DMG).

No documentation.
The department, till date, has verified documents of several mining companies till the financial year 2007-08. For the last six years, there has been no documentation available of VAT assessments filed by most companies.

The department has been investigating mining firms by collating information from the Lokayukta, Railways (as huge amount of iron ore was transported by rail outside Karnataka), the DMG and CBI.

“How many more companies have evaded VAT will be ascertained after verifying documents,” said Seth. As many as 108 companies have been named in the Lokayukta report on illegal mining.