The income tax department has issued recovery notices to at least 100 big and small jewellers in Tamil Nadu for cash deposits of demonetized notes made on November 10, 11 and 12 of 2016.
The notices have been issued to all big and middle-level jewellers, mostly in Chennai and Coimbatore, based on the returns they filed and the deposits they made in various banks.
The jewellers have been asked to pay 20% of the total tax dues immediately and the remaining amount within 30 days.
"Jewellers are facing problems in paying taxes as sales have been down for the past few months," Madras Jewellers and Diamond Merchants Association president Jayanthilal J Challani told TOI.
After March 2017, jewellers submitted returns and since then, there have been queries from the I-T department.
"It is based on the returns filed that we have asked jewellers to appear before us and explain the source of income and the deposits made after demonetisation. It is a routine notice which has been issued," said a senior I-T official, seeking anonymity.
As per the Income Tax Act, even if an assessee wants to appeal against the demand notice, he has to pay 20% of the total demand.
"We have been receiving notices from the income tax department in the last one month asking us to pay the amount," said Challani. The association is yet to decide on approaching finance minister Nirmala Sitaraman for some relief.
"It is the timing that has put us in a fix. Sales have plummeted due to economic slowdown," said Challani. "We are facing problems with regard to working finances. Some of us will have to pay not less than 80 crore within 30 days," he said.
There was a mad rush to jewellery shops soon after Prime Minister Narendra Modi announced demonetization of high-value 500 and 1,000 currency notes.
"There was a ban on jewellers to receive old notes past midnight on November 9. But some went ahead and received the banned notes even the following day," said the senior I-T officer.
"Though it is more than three years since demonetisation came into force, we completed the assessment of the returns filed by several jewellers recently and issued notices," said the officer. "There were searches in some jewellery shops and residences of jewellers after we received information that they had accepted the banned currencies between November 8 and December 31, 2016," he said.
I-T sleuths conducted the searches at jewellery shops across Chennai and other TN cities and towns. Soon after demonetization was announced on November 8, there was a bank holiday.
Courtesy - TOI
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