New trend of fake VAT refund

KATHMANDU, DEC 2: 

The department of Revenue Investigation has found new method of evading Value Added Tax (VAT) by some industries that produce materials like cement and rod.

“It is found that industries are issuing invoices of additional construction materials in the name of contractors,” the department source said, “But depots of concerned companies pay the amount of materials.”

The reason is to receive VAT refund of all materials from the government, he clarified. “However, depots of such industries sell cement and rod to the consumers without issuing Value Added Tax (VAT) bills.”

Industries are cheating a large chunk of revenue like this, an official from Inland Revenue Department said, adding that revenue authority has been failing to curb such trend due to nexus between industrialist and politicians. Meanwhile, Department of Revenue Investigation is carrying out investigation of Laxmi Steel suspecting Value Added Tax (VAT) evasion using the same method. “The department had confiscated bills and accounts ledger from the office of Laxmi Steel,” director general Shanta Bahadur Shrestha said, adding that the department has asked Inland Revenue Office, area No 3 to carry out detailed investigation against the company.

Source: THT