In the wake of increasing instances of pharmaceutical manufacturers evading taxes, the Department of Pharmaceuticals (DoP) has claimed that it had already initiated steps to plug the loopholes and ensure better compliance to the norms.

Sources in the department said the show cause notices were sent to manufacturers for recovery of tax invoking deterrent penalties and interest. The Government also conceded that it was aware of the evasion of tax running into huge amounts.

However, when contacted, the DoP sources refrained from naming the companies involved and the exact amount of dues from the companies. More focus was being given towards collection of intelligence, intensive audits and checks to prevent evasion of tax in collaboration with the Ministry of Finance, sources added.

"Resources have also been taken to educate the tax payers to increase level of compliance. The audit wing has been directed to thoroughly verify the records of pharmaceutical companies during their visit so as to detect evasion if any, by the concerned companies," sources said.

The authorities concerned in pharma hubs like Dehradun, Haridwar and Baddi had raided the companies some time back and started summoning owners and officials of companies for further investigations. During the raids in 19 pharma companies, tax evasion to the tune of Rs.40 crore were reportedly detected.

Sources said that the raids were carried out following a tip-off about these units not showing their actual sales in the returns and claiming wrong exemptions in the annual Sales Tax. Officials raided these units situated in different areas in the state and seized several incriminating documents and other evidences against the accused.