In a first arrest of a service tax defaulter in the northeast, a managing director of a mining firm has been held for allegedly evading this central levy to the tune of about Rs 4.71 crore.
Ashok Jain, Managing Director of M/s Saumya Mining Limited, a registered entity under the Shillong (Meghalaya) Central Excise and Service Tax Commissionerate, was arrested for continued default in tax payment, officials said today.
The firm, engaged in extraction and Coal, Uranium and metalliferous mining, did not offer any comment to phone call and emails requests by PTI.
The company was providing services of mining of minerals, oil or gas services to M/s Lafarge Umiam Mining Pvt Ltd at Shella, East Khasi Hills in Meghalaya, and has been collecting the service tax but failed to pay the amount to the exchequer, the officials said.
During the course of investigation, it was found that the firm (Saumya Mining Ltd) had collected nearly Rs 6.77 crore service tax for the period from April 2012 to October 2013.
Whereas, it paid about Rs 2.06 crore to the government thus short in paying about Rs 4.71 crore, the officials said.
“They are liable to pay interest on the said amount not paid or short paid,” they said.
Jain was responsible for payment of collected service tax to the government. He was arrested from his Kolkata residence on December 10 by a team of officers of Central Excise Commissionerate, Shillong, the officials said.
He has been sent to judicial custody till December 24 by a Chief Judicial Magistrate court in North 24 Parganas in West Bengal.
It is the first arrest of a service tax defaulter in the northeastern region, they said.
An evasion of service tax of Rs 50 lakh and above has now been made a cognisable offence after the passage of current fiscal’s Finance Bill on May 10. Finance Minister P Chidambaram has proposed provisions of Criminal Procedure Code (CrPC) to arrest such offenders in 2013-14 budget, in line with customs and central excise laws.
Earlier, the officials did not have any power to arrest a person for service tax evasion.
A Kolkata-based courier company owner was arrested in August, is the first such arrest in the country, for alleged non-payment of the tax of about Rs 67 lakh.
An offender is punishable with imprisonment of up to seven years for service tax defaults of more than Rs 50 lakh.
The Finance Ministry is also implementing a first of its kind amnesty scheme – Voluntary Compliance Encouragement Scheme (VCES) – for service tax defaulters.
The VCES, which came into effect from May 10, allows a service tax defaulter to pay dues without any penalty or late payment charges. Under the scheme, a person may make a declaration to the designated authority on or before December 31, 2013.