Tax defaulters to lose LPG sop, PAN card, warns government

Aimed at crippling and checking the activities of wilful tax defaulters, the Income Tax department has mooted a number of such measures to be undertaken this financial year. It has even asked its officers not to shy away from detention and auctioning of attached assets of those accused of evading taxes. 

The Central Board of Direct Taxes, in a strategy paper for the current fiscal, has directed the tax department to use the provision, used rarely, stated under Section 276C (2) of the IT Act that stipulates rigorous imprisonment for a period between three months and three years which may also carry a fine. 

The I-T department has a designated official to execute these rare powers, called the Tax Recovery Officer (TRO) within its establishment. The taxman will block PAN in such a way “that these defaulters are not sanctioned any loans or overdraft facility by public sector banks, as the same is bound to become non-performing assets”. 

Further, it said, “It can be suggested to the Ministry of Finance to withdraw facility like LPG subsidy which is directly credited in to the bank accounts of the said defaulters” in order to “disincentive” the defaulters. The taxman also proposes that the identities of such blocked PANs be circulated to the Registrar of Properties “with a request for not allowing any registration of immovable properties where such PANs are involved.” 

Such defaulters’ information has also been recommended to be circulated across tax offices so that their activities, loans or government subsidy can be plugged country-wide. The department is likely to subscribe to the Credit Information Bureau Limited (CIBIL) data, on a possible payment basis, to check out the financial activities of defaulters and undertake action against them for recovery and freezing of assets. 

Beginning last year, it has also started to ‘name and shame’ large tax defaulters (over Rs 20 crore default) by publishing their names and other credentials in leading national dailies and on its official web portal. Till now, 67 such entities have been put in public domain by the department.