BANGALORE: The evasion of commercial tax by a large number of dealers and traders in the State continues unabated. According to official estimates, about 58,000 dealers having a turnover above Rs. 2 lakh a year have not yet registered themselves with the department under the value added tax (VAT) system, resulting in revenue loss to the exchequer.

In order to track these tax evaders, the Department of Commercial Taxes has strengthened its tax collection wing to 160 officials across nine divisions of the department in the State. Yet a large number of dealers, traders and shopkeepers are evading tax in major cities and towns. As of now, there are 3.5 lakh dealers registered under VAT in the State, top officials of the department told The Hindu .

The department has formed a team of officials in each division to catch tax evaders, said the officials. Sixty-three officials in Bangalore division, seven each in Mysore and Gulbarga divisions, five in Malnad division, 10 in Mangalore division, 19 in Dharwad division, 17 in Belgaum division, nine in Davangere division and 23 officials in the Large Traders' division in Bangalore have been given the task. The department has set the collection target at Rs. 14,190.51 crore for 2006-07.

Commissioner of Commercial Taxes B.A. Harish Gowda told The Hindu that each official has been asked to identify at least two dealers a day who are not paying tax. As the "black economy" still exists, some officials have been tracking 10 dealers a day.

In November, the officials caught 1,260 dealers who had not registered themselves with the department. As many as 424 dealers in Bangalore division, 48 in Mysore division, 82 in Malnad division 18 in Dharwad division, 36 in Belgaum division and 72 in Davangere division were caught and made to register themselves with the department as on November 24, 2006, the officials said.

"Dealers need not panic whenever an officer of the department inspects their business premises. The objective of the department is to enforce the law. While doing so, some officers may be rude, but all officers are not so," he said.

The State switched over to the VAT system in 2005. The State Government intended to introduce VAT along with software to process it. But it could not because the software developed by a foreign agency did not fulfil the needs of the department.

Now, the department has asked the National Informatics Centre (NIC) to develop software to process VAT.

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