Not too long ago, Prime Minister Narendra Modi had caused a controversy by saying that even selling ‘pakodas’ is considered a form of employment, during an interview. “If a person selling pakodas (snacks) earns Rs 200 at the end of the day, will it be considered employment or not?” the prime minister had said – an idea Bharatiya Janata Party (BJP chief) Amit Shah agreed with during his first Parliament speech. The statements were slammed by the opposition parties including Congress.
Now, a recent development has brought ‘pakodas’ back in the news. Ludhiana’s famous “Panna Singh Pakode Wala”, has recently surrendered a whopping Rs 60 lakh as undisclosed income in the face of a survey of their two branches by the Income Tax Department.
According to a report by Times of India, two different teams of the department under the instructions of former principal commissioner DS Chaudhary initiated their actions against Panna Singh’s pakoda outlets located in city’s Model Town locality. The current owner of the shops Dev Rak has confirmed to the daily that he has surrendered Rs 60 lakhs before the IT department as undisclosed income following the raids on Thursday.
Ludhiana: ‘Panna Singh Pakore wala’ surrendered Rs 60 lakh to the Income Tax department after a survey was conducted on him on Thursday.The action was taken by IT dept on 2 outlets after the dept got specific inputs that owners of shop were suppressing their actual income.#Punjab pic.twitter.com/R1EmFGDzaT
— ANI (@ANI) October 6, 2018
The report claimed that the action was undertaken by the department after receiving specific inputs about the suppression of the actual income by the owners of the firm.
The tax department officials have checked the sale of the shop by keeping an officer stationed at the shop on Thursday, the TOI report added. This step was taken to check the approximate annual tax liability of the firm and verify it with the tax returns deposited by the owners.
Even as IT raids on firms and individuals, suspected to be filing incorrect Income Tax Returns or hiding income, are routine steps taken by the department, the government has also been closely involved in ensuring a wider tax base. The Narendra Modi government has taken several steps, including simplification of the Income Tax filing process and linking of the PAN Card with Aadhaar, to ensure more direct tax collections. As a result, the direct tax collections surged 16% between April and September.
It is not clear if the pakoda outlet was registered under the Goods and Services Tax (GST). Under the GST, smaller firms are given exemption from being taxed. Moreover, firms with annual turnover up to Rs 1.5 crore can opt for composition scheme, which makes them tax exempt. In general, a 5% GST is levied on eateries without the Input Tax Credit (ITC) claim.
