The Income Tax Department team raided five locations of Harish Plywood in Meerut on Tuesday. Till 10 pm, a 14-member team conducted the survey. The proceedings continued on Wednesday morning as well. At the same time, the Income Tax Department team took possession of the house of Harish Plywood Industry owners in Jagannathpuri worth about ten crores, arrived in seven cars on Tuesday morning itself.
As soon as they went inside, the team took the mobile phones of the relatives. Everyone stopped going out. Till ten o’clock in the night, the work of searching five places including his house and establishment went on for about 15 hours. In the initial 12 hours of investigation, details of over 93 lakh cash and jewelery worth lakhs of rupees were taken. At Jagannathpuri residence, 14 investigating officers carried out investigation in a three-storey house in seven vehicles. No one was allowed to go in or out during the investigation. Police were deployed at all the investigation sites.
The case of tax evasion by under billing in the business of Plywood and Sanmica remained the focus of investigation by the Income Tax Department. According to the information received from departmental sources, the counter and factory cell are being hidden. Cash sale worth lakhs of rupees is being done every day without bills.
This is how tax evasion happens
Board, ply and mica are used in making furniture for home or shop. This business is done completely under billing only. Except the top three to four brands, plywood coming from Jagadari and Yamunanagar comes on 30 to 50 percent billing only. In such a situation, the price of a ply and board vehicle of 18 lakhs is shown between 7 to 9 lakhs. Crores of rupees of tax are evaded every year due to cash sale at retail counters.
There are 180 plywood hardware shops in the city. The turnover of plywood veneer is more than 10 crores per month in the city. Plywood is much cheaper to make furniture than wood. The weight is also less, so its demand is also high. Plywood, laminate and hardware attract 18 per cent tax.
In a month, small traders get one car of 10 tonnes of plywood, while big traders get five to ten vehicles from Yamuna Nagar in a month. Due to under-billing, tax evasion of lakhs of rupees is done in one go.
Big game in MR, BWP
In plywood or board, MR (moisture resistant), BWR (boiling water resistant) and BWP (boiling water proof) play a big role. Boards are sold with ISO and ISI stamps. Barring three to four top brands, only 95 per cent of the local goods are sold in the market. Every shopkeeper tells the board only BWP. Most of the goods are sold without bill.
This is how under billing happens
The cost of a board of eight by four of 19 mm sits at Rs 1600 for Rs 50. In this, an additional tax of Rs 288 has to be paid at the rate of 18 percent. To save tax, traders get boards on under billing.
The cost of a board of Rs 1600 is shown on
paper at Rs 900. On reducing the value of the board, the tax on the same board at 18 per cent comes down to Rs 162. There are at least 400 to 500 ply boards in a car. In this case, tax evasion also increases. In the preliminary investigation, the vehicle is not stopped at the border if the tax and number are found to be correct.