Luxury Brands Louis Vuitton and Harley Davidson and several other prominent players in the business industry have fallen under tax radar for taking cash above Rs. 2 lakh in clear violation of a new income tax law introduced in this year’s budget.
Earlier this year between January and March, The Directorate of Intelligence and Criminal Investigation, Department of Income Tax had run a special project to nail these companies.
Moreover, a survey has also revealed that Harley Davidson in Guwahati, Venkys in Pune, a Louis Vuitton dealer, a Gucci dealer, 5-star hospitals in Mumbai, Delhi, Chennai, Lucknow and Indore were accepting cash of more than Rs.2 lakh.
According to sources involved with the survey, a total of 1705 cases were found to be violating Section 269ST of the Income Tax Act.
Talking of the new Section 269ST introduced under the Finance Act, 2017 with effect from April 1, 2017, puts a limit on cash transactions to put a check on black money and tax theft. The section has been in buzz as it provides a penalty for any cash transaction above the value of Rs. 2 Lakh, equal to the transaction amount.
The violators will be levied a penalty of Rs.45.60 crore under Section 271DA. The Section 271DA of the Income Tax Act states that “if a person receives any sum in contravention of any of the provisions and rules of Section 269ST, he shall be liable to pay a penalty of an amount equal to the amount of such receipt received in cash.”
Meanwhile, an officer associated with Central Board of Direct Taxes (CBDT) official said on condition of anonymity that recently they had conducted searches on some fashion designers who had taken cash above Rs. 2 lakh.