Tag Archives: tax evasion

IRCTC not issuing invoice, causing huge loss to exchequer: Tax consultant

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Chandigarh, Sep 16 (IANS) The Indian Railway Catering and Tourism Corporation (IRCTC), a public sector undertaking under the Ministry of Railways, is causing loss to the exchequer by not issuing invoice to the consumers for eatables sold within trains, a tax consultant said on Friday.

In a letter to Union Finance Minister Nirmala Sitharaman, Chandigarh-based tax consultant Ajay Jagga said the Supreme Court recently issued notices to the Central government on a plea seeking to plug existing loopholes in the GST system.

The IRCTC, which is selling food in the trains, appears to be a similar entity causing huge loss to the exchequer, he said.

He said he travelled in Shatabdi Express to New Delhi from Chandigarh on Thursday. While travelling, he ordered a cup of tea and paid Rs 20 for this.

Later he asked for an invoice. On his insistence, an invoice of Satyam Caterers Private Ltd was issued.

One cup of tea sold without invoice results in a GST loss of Re 1, he said. “Imagine other items like cold drinks, chocolates and food booked within the train without issuing invoices,” Jagga, a former member of the Tax Intelligence Unit, told IANS.

Also, he said, the waiters were charging food amount in the bill but not issuing the invoice to the consumers.

“The working of IRCTC waiters and other staff is causing huge losses to the exchequers. On one hand, we are penalizing shopkeepers for not issuing bills and on the other the IRCTC is not issuing bills and the number of such transactions, pan-India, would be in lakhs everyday,” said his letter.

Earlier, in a letter to the Union Finance Minister, he had said the Centre should issue necessary advisory to all states that restaurants should stop charging unjustified extra cost, which was being imposed on consumers for items such as pastry, cake, etc.

India Seeks to Revise Tax Treaties with Foreign Nations: Minister

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Indian government is planning to revise the tax treaties with partner countries to enable the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) to use the data for prosecution of those who have stashed black money abroad, said a statement.

Treaty partner countries have been requested to modify the tax treaties to explicitly include provisions that will enable information exchanged for tax purposes, including criminal proceedings in non-tax matters.

About 40 treaties for avoidance of double taxation have been revised accordingly and India has also signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which also similarly facilitates exchange of information.

India is gearing up drive on compiling information by non-tax agencies, subject to agreement by the Competent Authorities of the Requested Contracting State.

However, not all treaty partner countries have agreed to the proposal. Since a bilateral treaty cannot be modified unless both treaty partners agree, it is not possible to provide any time frame for this purpose, said Mr. Santosh Kumar Gangwar, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha.

India, Kazakhstan Sign Protocol on Double Taxation

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India and Kazakhstan signed in New Delhi today a Protocol to amend the existing Double Taxation Avoidance Convention (DTAC) between the two countries, renewing the earlier pact signed on 9th December, 1996 for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income.

The new protocol provides for internationally accepted standards for effective exchange of information on tax matters. Further, the information received from Kazakhstan for tax purposes can be shared with other law enforcement agencies with authorisation of the competent authority of Kazakhstan and vice versa.

The Protocol this time included a Limitation of Benefits clause, to provide a main purpose test to prevent misuse of the DTAC and to allow application of domestic law and measures against tax avoidance or evasion.

It provides for specific provisions to facilitate relieving of economic double taxation in transfer pricing cases, which is considered a taxpayer-friendly measure and in line with the Base Erosion and Profit Shifting (BEPS) Action Plan to meet the minimum standard of providing Mutual Agreement Procedure (MAP) access in transfer pricing cases.

The bilateral Protocol inserts service PE provisions with a threshold and also provides that the profits to be attributed to PE will be determined on the basis of apportionment of total profits of the enterprise.

The new Protocol replaces existing Article on Assistance in Collection of Taxes with a new Article to align it with international standards, said a statement from the Finance Ministry.