Service tax evasion - Service provider detained

Service tax evasion - Service provider detained

Mangalore Today News Network

Mangalore, Aug 12, 2014 :   In a press release issued by Commissioner Dr M Subramanyam, he said that as on date over Rs 51 lakh service tax collected is retained by a service provider for more than six months without remitting to the exchequer.

The service provider based in Andhra Pradesh having business at Karwar has been evading appearance before the investigating officers for several months.   Officers of the Commissionerate of Central Excise and Service Tax, Mangalore have arrested the Managing Director of a private limited company providing storage and warehousing services at Karwar, for collecting the service tax of over Rs 60 lakh from August 2011 to March 2014 and not remitting the same to the governments account.

He had appeared before the investigation only after a petition was filed before the High Court for issuance of a non bailable warrant to secure his presence. The investigation has revealed that the service provider has been evading tax for three years. The investigation has unearthed that despite providing taxable services since August 2011, the service provider has failed to obtain the registration certificate till February 2013. The accused  was not even complying with the basic statutory requirements like filing of returns, intimating the taxable services provided, discharging appropriate service tax liability, remitting the service tax collected to the government’s account, said the release.

As per Section 89(1) (d) of Finance Act 1994, whoever collects service tax more than Rs 50 lakh and fails to credit the same to the government within six months from the day on which such payment becomes due, is liable for imprisonment for a term which may extend to seven years.  The service provider was arrested under Section 91 of the Finance Act 1994 and was produced before Principal Civil Judge Senior Division and Chief Judicial Magistrate, Mangalore, who remanded him to judicial custody.