M A I N   N E W S

ED begins probe into Punjab’s VAT refund scam
Ruchika M Khanna
Tribune News Service

Chandigarh, March 29
The Enforcement Directorate has started its investigation into the Rs 500-crore Value Added Tax refund scam in Punjab. The department has registered an Enforcement Case Information Report (ECIR). Industrialists from Ludhiana, Khanna and Mandi Gobindgarh are accused of fraudulently obtaining VAT refunds by showing forged export documents.

The ED is believed to be looking into the way these exporters, who claimed VAT refunds on bogus exports, violated the Foreign Exchange Management Act (FEMA).

The ECIR under provisions of the Prevention of Money Laundering Act has been registered. The ED sleuths are investigating how exporters sent money to fake consignees in other countries and then got the money back in dollars. The money (in rupees) is alleged to have been sent abroad and dollars received through hawala in return.

The ED has also sought information regarding all cases where VAT refunds have been issued to three exporters — York International, Jaldhara Exports and Trimurti Hoseiry — from the Punjab Excise and Taxation Department.

The owners of these companies will now be summoned and asked to explain the money trail. The ED sleuths are also looking at the use of money refunded to these exporters by the government as VAT refund. It is believed that other than three companies, over 30 other companies are involved in the scam. The case is already being investigated by the Economic Intelligence Unit of the excise and taxation department.