Nagpur: Five luxury car dealers found stashing GST

NAGPUR: Agencies selling high-end luxury automobile brands like Jaguar and

BMW

’s cars, and motorcycles like Harley Davidson and Kawasaki were found to be charging goods and services tax (GST) from the buyers and not passing it on to the government.

A raid by the directorate general of GST intelligence (DGGSTI) has led to a demand of Rs25.04 crore being raised against five such agencies in the city dealing in these vehicles. The interest component on the tax liability runs up to Rs28.47 lakh.

Given that the prices of these vehicles go up to over a crore, the GST component also comes to a substantial amount, which is shelled out by the customers. In this case, it was found that the agencies had not deposited the tax at the government exchequer for as long as four months to one year, in some cases.

GST is charged at 28% on these products, along with a hefty cess. Indirect taxes like GST, which are added to the sale price of a commodity have to be passed on to the government.

GST has to be deposited into the exchequer within a month of recovery from the buyer; after that interest is charged. Not depositing an amount of Rs5 crore and above for a period of three months or more amounts to prosecution, unless the liability is cleared right away with interest.

The agencies that were covered during the DGGSTI raid are — M/s Anand Techno Marketing Private Limited and M/s Anand Mine Tools that sell Jaguar cars, M/s Mandhan Motors — an agency for BMW vehicles, M/s Star Bikes — a dealer for Kawasaki bikes and M/s Legend Bikes — the dealer for Harley Davidson motorcycles.

The highest due is of Rs15.44 crore and Rs 6.91 crore raised on the two Jaguar dealers respectively, followed by Rs2.34 crore on Mandhan Motors the agency for BMW cars. The sleuths have raised a liability of Rs27.74 lakh and Rs5.77 lakh respectively, for dealers in Kawasaki and Harley Davidson bikes.

The investigations against the dealers were initiated on the basis of intelligence received from customers that the agencies were not depositing the tax collected from buyers.

Sources said that bills having the GST component were issued to the buyer, and it appeared like an entirely legal transaction. However, the returns were not filed as it cannot be done unless the tax is paid. At the same time, sale of the vehicles could also not been concealed as documents have to be filed with a number of other agencies like the RTO. The tax sleuths went through the documents and found that a substantial amount of the tax was charged but not paid.

This is a graver offence as compared to other cases, where the tax itself has not been charged by resorting to some jugglery, said officials.