Bogus dealers flourish on 4-yr assessment norm

new delhi: the sales tax department has unearthed a scam that is causing a revenue loss of several crore of rupees to the city government every year. terming it as the ``bogus dealer scam'''', officials have found that several fictitious dealers have registered with the sales tax department in the last few years. their aim: to obtain the st-i and st-35 forms which are required for a dealer to carry out business transactions.no dealer in the capital can sell goods without obtaining these forms, for which the basic requirement is to register with the sales tax department. the ``bogus dealers'''' supply goods to several smaller dealers. to show to their customers that the sales are genuine, these dealers produce the forms. however, they close their establishment within four years. since sales tax assessments in the capital are done every four years only, there are no records of the goods sold by these dealers and taxes charged on them. some of these bogus dealers are said to be doing a daily business of over rs 50 lakh. ``the quantum of tax in such deals cannot be assessed since no record of sale of goods exists. these dealers simply disappear at the time of tax assessments,'''' a senior official said. also, many companies, whose partners would break up within four years, would be embroiled in litigations, thus making it difficult for officials to traced books of accounts, another official added. sales tax commissioner p k tripathi said some sales tax officials could be involved in the scam. ``without the assistance of our officials, it is very difficult to obtain the st-i and st-35 forms,'''' he said. some sales tax officials are reportedly issuing the two forms without verifying whether the dealer is genuine. in an attempt to check the menace, the sales department has now reduced the period of assessment from four to two years. an ordinance to this effect was issued by the lt-governor on thursday. sources said the period was likely to be reduced further. the department officials have also been instructed to be more vigilant while issuing the st-i and st-35 forms. ``with the assessment period being reduced to two years, it will be very difficult for the dealers to fudge their accounts. then the genuine dealers will not need to maintain records for four years,'''' tripathi said. a similar recommendation had been made by well-known economist rajah chellaiah, who was heading a committee on sales tax reforms for delhi. senior officials are of the view the move will also help increase the sales tax collections. the department has fixed a target of rs 3,300 crore for this fiscal (2000-2001), against rs 2,500 crore of the previous year. in order to further increase sales tax collections, which the largest revenue earner for the government, more reforms are likely to be introduced in the next few months. officers smart, dealers smarter * the sales tax department has detected a scam of bogus dealers who operate for four years without paying any tax * some sales tax officials are reported to be working in collusion with these bogus dealers * to check the menace, the sales tax department has reduced the period of assessment for dealers from four to two years * the move will also help the sales tax department achieve the target of rs 3,300 for 2000-2001. more tax reforms likely in the next few months