Top officials in the tax department said apart from evasion of tax, the dealers were found selling Chinese mobile phones not having the mandatory International Mobile Equipment Identity (IMEI) number, which could pose a major security threat.
"We have detected evasion of Rs 230 crore by 59 mobile phone dealers in the city. These dealers were selling the handsets without payment of Value Added Tax (VAT). We have now issued notices to them," an official told PTI.
The tax department had conducted a series of raids on the mobile phone dealers in Karol Bagh and Gaffar market in the last few months after getting inputs from the Customs department. Most of dealers were found selling Chinese made handsets.
"It is a huge racket. Besides evasion of tax, it is a matter of security risk as phones not having IMEI numbers cannot be tracked by security agencies. These phones may be used by terrorists to even set off bombs," the official said.
The 15-digit IMEI number helps the security agencies to track the phones. The Tax department has already already sealed premises of some of the dealers who were operating without the mandatory permission.
According to Indian Celluar Association, the country`s mobile handset association, 30 per cent of the total mobile phone market in the city has been captured by the traders who sell the imported products, mostly sourced from China.
Quoting customs data, ICA National President Pankaj Mohindroo said a total of 72.88 lakh Chinese handsets had come to the city through the Delhi Airport in 2009-10 and the total value of the handsets has been estimated at Rs 1,380.56 crore.
The officials said the Chinese made handsets are brought to the city through the air route by payment of customs duty and then they go to the grey market, including in other states.
"Although a ban was imposed on imports of mobile phones without having IMEI numbers, it was virtually not possible to check all the mobile phones because of the quantity. In some cases, traders use fake IMEI numbers," they said.
An ICA official said most of the "huge imports are cleared through" wholesale distribution channel. They said retailers operating under the "illegal wholesalers" do not issue bills to the customers to avoid coming under government scrutiny.
One out of the every four handsets costing above Rs 10,000 is billed in Delhi and the rest are billed outside the state to avoid payment of VAT, they said.