Mangaluru, Nov 29, 2014: Reports state, the Central Excise and Service Tax Commissionerate, Mangaluru has placed under arrest the proprietor of a major construction company for service tax evasion of over Rs 1 crore. The amount evaded consits of about 85% of service tax already collected from customers and not redited to the Government exchequer, stated Commissioner M Subramanyam.
The detailed investigation carried out by the Commissionerate found the service provider though had been providing taxable service of works contract service and others, failed to take service tax registration which was taken only after the lapse of considerable period. Also, no filing of the statutory returns to the department regularly and neither discharged the appropriate service tax liability is evident. The accused was not crediting the service tax collected from the customers to the Government exchequer. Also, the taxable services to various customers including their sister concern, the details have neither been properly recorded in their financial accounts nor correctly declared to the department. During the investigation, the service provider has admitted to the contraventions, the commissioner said.
As the service tax was collected but not paid to the exchequer for more than six months and it exceeded Rs 50 lakh, the acts of omission and commission on the part of the service provider constituted an offence prescribed under Section 89(1)(d) of the Finance Act, 1994 thereby attracting imprisonment extending to seven years in terms of Section 89(1)(ii) of the said Act. Further such offenses shall be cognizable as per Section 90 of the Finance Act.
The accused was arrested under Section 91 of the Finance Act, 1994 and produced before the Principal Civil Judge Senior Division and Chief Judicial Magistrate, Mangalore who remanded him to judicial custody. Further investigation is stated to be on going.