Aviation firm CFO arrested for Rs 1 cr service tax evasion

The firm has allegedly not paid its service tax liabilities for 2012-13 and 2013-14

A Chief Financial Officer (CFO) of a Delhi-based aviation company has been arrested for allegedly evading service tax of over Rs 1 crore.

 

The firm, which was providing helicopter chartering services, had not paid its service tax liabilities for 2012-13 and 2013-14. It has not filed service tax returns, mandatory for a service provider, during this period, a revenue department official said.

 

The official was arrested after it failed to pay collected service tax to the government exchequer. The amount of evasion is over Rs 1crore, he said.

 

The firm is also suspected to have fraudulently availed CENVAT (Central Excise Value Added Taxation) credit, a taxation method to avoid payment of double duty to the government, of more than Rs 30 lakh, the official said.

 

In addition, the company is also facing departmental proceedings in a show cause notice for Rs 3.9 crore for short payment of service tax for a period before 2012-13. "Further investigation in the case was continuing," he added.

 

This is the second arrest by the Delhi Service Tax Commissionerate.

 

Earlier, a Chief Executive Officer (CEO) of a software company was arrested in July last year for allegedly evading service tax of Rs 10 crore.

 

An evasion of service tax of Rs 50 lakh and above has now been made a cognizable offence after the passage of 2013-14 Finance Bill on May 10 last year.

 

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.