Tax sleuths probe L&T's sub-contractors for Rs 100 cr evasion

These firms were getting amount of service tax, to be paid to the government, along with the work order payment from the L&T but the same was not being deposited with the exchequer, official sources said

Various sub-contractor firms of engineering and construction major Larsen and Toubro (L&T) are being probed by central revenue department officials for alleged service tax evasion to the tune of about Rs 100 crore.
    
These firms were getting amount of service tax, to be paid to the government, along with the work order payment from the L&T but the same was not being deposited with the exchequer, official sources said.
    
A team of Directorate General of Central Excise Intelligence here has registered a case to probe alleged service tax evasion and carried out searches at various premises of the firms across the country recently.
    
The searches were also conducted at the construction division of Larsen and Toubro in Chennai, the sources said.
    
"The Revenue department officials did make an enquiry with us on the matter of service tax. Relevant details and documents have been provided," a L&T spokesperson said in an email response to PTI query.
    
The Revenue department has taken note of the documents and details provided.  "In case any further clarifications are required, we shall provide the same to take the matter to its logical conclusion," he said.
    
The probe so far has found that the sub-contractor firms, whose premises were searched, were empanelled with L&T's construction division and receiving work orders for different projects by the construction giant by way of sub-letting, the sources said.
    
These firms were allegedly evading their service tax liability, they said.
    
It was also found during the investigation that the sub-contractor companies were not filing mandatory ST-3 form, for service tax returns, in a regular manner.

Sources said most of the sub-contractor firms were manipulating the details of work orders and job contract values and amount of service tax in their records.

The alleged service tax evasion by the sub-contracting firms is about Rs 100 crore, they said.
    
Following the searches at one of the sub-contractors premises in Kolkata, Coimbatore and Bhuvaneshwar, the firm has deposited Rs 11 crore as their service tax liability.
    
The sub-contractor companies have to pay 12.36 per cent of service tax on the total value of the work order.
    
The team of tax officials are examining the accounts book and probing some other sub-contractors empanelled with the L&T for alleged evasion, the sources added.