Ad Co Chief in Lock up for Service Tax Evasion in Mangalore

Officers of the Commissionerate of Central Excise and Service Tax, Mangalore arrested a Chairman & Managing Director of a major company providing advertisement services and event management, for collecting the Service Tax of over Rs.1.94 crores from April, 2012 to June, 2014 and not remitting the same to the Government account. Out of this amount, Rs.1.16 crores was retained by them for more than 6 months.

During the audit of the service provider, the officers found that the service provider failed to remit the Service Tax collected to the Government account. The detailed investigation initiated in the matter prima facie revealed that the service provider has been evading payment of appropriate Service Tax for over two years. Scrutiny of the documents furnished by the service provider revealed that they were not complying with even the basic statutory requirements like timely filing of returns intimating the taxable services provided, discharging appropriate Service Tax liability, remitting the Service Tax collected to the Government account etc. thereby contravening the provisions of the Finance Act, 1994 and the Rules framed thereunder.

As per Section 89(1)(d) read with Section 89(1)(ii) of the Finance Act, 1994 whoever collects amount in excess of Rs.50 lakhs as Service Tax but fails to credit the same to the Government account within a period of 6 months from the day on which such payment becomes due, is liable for imprisonment for a term which may extend to 7 years. Such offences shall be cognizable as per Section 90 of the Act.