Hyderabad: Basmati rice dealers and liquor traders are increasingly evading tax, resulting in huge losses for the Telangana state exchequer.
While basmati rice dealers export huge quantities of rice from Hyderabad to other states and countries without trade licenses, city liquor traders are evading privilege tax by resorting to illegal exchange of liquor stocks among themselves.
It is estimated that the government is losing nearly Rs 200 crore per month on account of tax evasion by basmati traders.
The wholesale markets in Begum Bazaar, Kishangunj and Osmangunj are known to be the top basmati trading centres in the country.
These markets receive thousands of tonnes of basmati from Punjab, Haryana and Delhi every month, a significant chunk of which goes unaccounted for, according to sources.
As per norms, traders have to pay 1 per cent market cess to the market committees concerned besides 5 per cent value added tax on sale of every quintal.
But these norms exist only on paper. During recent raids, it was found that nearly 600 unlicensed traders were involved in the basmati trade in Hyderabad.
“We have recently issued notices to 200 basmati traders. The tax arrears will be recovered by invoking the Revenue Recovery Act. The government is also actively considering a proposal to bring these traders under the Essential Commodities Act,” said Mr Rajasekhar Reddy, selection grade secretary, Hyderabad Market Committee.
Liquor traders on the other hand are evading the 13.5 per cent privilege tax. The Excise department collects Rs 1.08 crore as license fee to set up a liquor shop in the Greater Hyderabad Municipal Corporation limits. It supplies liquor worth Rs 7.56 crore to each outlet, to be sold for a period of one year.
However, shops in prime locations sell more than this. Such shops are supposed to pay 13.5 per cent privilege tax. To avoid this, the traders are procuring liquor stocks from shops that sell less though the norms state that stocks should be obtained only from the Excise department, sources said.
Recent raids conducted by Excise enforcement officials revealed that liquor traders were obtaining stocks from other shops by offering them 5 per cent more.
“The government had lost nearly Rs 75 crore last year due to privilege tax evasion. The liquor sales are expected to increase from Rs 12,000 crore last year to Rs 13,000 crore this year, and if tax evasion is not checked, the government will lose over Rs 150 crore privilege tax," said an excise official.
Basmati centre
Though Telangana is not a major producer of basmati rice, Hyderabad has emerged as the major basmati trading centre since 2012 after the state government in undivided AP announced relaxation on exports.
This resulted in mill owners from different parts of the country diverting large quantities of rice to Hyderabad and from here to other states and countries.
City traders mainly source basmati from Haryana, Punjab, Madhya Pradesh, Uttar Pradesh, Rajasthan and Delhi and export to other states.
