Panel detects huge tax evasion in CWG projects

Tax demand notices to the tune of Rs 240 crore have been slapped on private companies and individuals involved in Commonwealth Games-related projects after the Chief Vigilance Commission (CVC) detected big ticket evasion.

In its annual report to Parliament on Monday, the CVC said recovery of about Rs 108 crore by way of service tax and workers welfare cess has also been collected from them by the authorities.

The CWG was mired in controversy as allegations of corruption surfaced even before the event commenced.

The CVC said that while scrutinising the details of various CWG projects, it observed non-compliance of statutory tax obligations.

“The initiative taken by the Commission in collaboration with the Labour Department resulted in recovery of an amount of Rs 41.8 crore towards workers welfare cess,” it said.

It alsosaid the Central Board of Excise and Customs (CBEC) has informed that service tax has been recovered to the tune of Rs 67.33 crore so far, which includes Rs 52.21 crore on the basis of the Commission’s inputs.

“Demand notices have been issued to the tune of Rs 240.77 crore. The reconciliation process with various departments or organisations regarding tax non-compliance issues concerning CWG 2010 is underway,” the report said.

The CVC had taken up 30 projects, valued at around Rs 3,500 crore, from 2008 for technical examination by its Chief Technical Examination (CTE) wing. The terms of reference were adherence to the desired quality in execution and shortcomings or lack of appropriate standards in the projects. After a number of complaints about quality, CVC looked into some while asking CBI to check other cases.

“A total of 19 regular cases and 10 preliminary inquiries were registered by CBI against CWG 2010, many of which were on the basis of references sent by the Commission. Similarly, a total of 26 cases were forwarded to the Chief Vigilance Officers for  investigation and fixing responsibility for the lapses,” the CVC report said.

The Commission said it used crowd-sourcing method through a web-based application. “A total of 37 organisations uploaded the details covering more than 9,000 projects, costing about Rs 13,000 crore,” it said.