Tax Authorities Conduct Raids on Jewelers, Traders in India

Manufacturing
20/09/2016 14:46

The income tax department conducted raids and surveys on over 50 jewelers and bullion traders across Maharashtra in the last week for alleged tax evasion, writes The Indian Express, while sources said similar tax raids have been conducted on over 100 jewelers and bullion traders across the country. In Mumbai alone the tax department raided and surveyed at least 17 wholesale jewelers on September 14. According to a jeweler who was surveyed by the tax department, the tax officials have directed the jewelers to declare undisclosed excess stocks and cash. Most of the jewelers feel the tax raids and surveys are a fallout of the central government's Income Declaration Scheme 2016, which kicked off on June 1 and runs through to September 30.

The scheme is designed to bring the substantial amounts of undisclosed or “black” money into the formal economy. Jewelers had asked for an extension of the closing date of the scheme and see the raids as a pressure tactic to ensure compliance by September 30. “The sudden increase in tax raids and surveys on jewelers could be because of a poor response to the IDS ...The raids are a way to build pressure on jewelers,” said Kumar Jain, vice-president, Mumbai Jewellers Association. The IDS is intended to encourage the disclosure of undisclosed income or assets that may be liable to tax for any assessment year prior to 2017-18. A declaration under the scheme will attract a tax of 30 percent of the undisclosed income, a 25 percent surcharge on this tax, resulting in a total levy of 45 percent on the undisclosed income. An IDS disclosure however, guarantees exemption from wealth tax and immunity from prosecution under the Income Tax and Wealth Tax Act.