9lakh firms don't file their I-T returns : Revenue Secretary
While the FinMin keeps on harping about the need to curb black money and prevent methods of offshore money laundering, there seems to be more trouble brewing at home. According to revenue secretary Hasmukh Adhia, more than 900,000 registered firms have not been filing their annual returns and are possibly indulging in money laundering schemes. Here's all you need to know about the incident.
The balance sheets don't add up
Only 600,000 of 1.5 million firms that are registered, file their annual returns with proper audited reports while the others either give the process a miss or end up showing zero income on their balance sheets. It is almost impossible to comprehend that such a large faction is incurring losses or making no profits for years at a stretch and still doing brisk business.
Cracking down on the miscreants
PMO has now set up a task force to keep a stringent eye on this phenomenon citing "there is no reason for us to let such companies operate in India." Notices have been sent to several of the dubious firms to explain their end of the story and severe punitive measures await if the explanations are not satisfactory or money laundering is found.
Keeping a vigilant eye on shell companies
One of the boons of the demonetization period was the fact that it uncovered several firms, which created shell companies periodically to channelize their money and avoid taxation. Arun Jaitley had earlier said, "Our target has to be to make sure India as it evolves from a developing to developed economy (also changes) from a tax non-compliant society to a highly-compliant society."
Making an example to deter others
The government is now done with all attempts of coaxing these companies to see the error in their ways and become compliant to norms; instead, it is aiming to set forward an example. "Once we are able to make an example of some of these offenders, I think others then will realize the benefits of compliance with the law," FinMin said.
Enforcing law to raise legitimate revenue for the larger good
Financial crime will continue to exist in one form or the other and with the advent of technology it is going to get more sophisticated with the passing of time, according to FinMin. Therefore, Enforcement Directorate (ED) officials have to be vigilant and on their feet to "strictly enforce the law in the endeavour to raise legitimate revenue which is in larger public interest."
