DGCEI slaps Rs 60 cr notice on DIAL for alleged tax evasion

The Delhi International Airport Private Limited (DIAL) has been slapped with a show cause notice by central revenue department for allegedly evading service tax of about Rs 60 crore.
In its show cause notice, the Directorate General of Central Excise and Intelligence (DGCEI) alleged that DIAL has not fulfilled its service tax liability on money collected by it through leasing out its land to developers to put up five star hotels and other commercial properties as part of its aerocity project, official sources said.
DIAL, which operates Indira Gandhi International Airport (IGIA) here, had been given about 5,000 acres land in and around the Delhi airport. It had leased out part of this land to private groups for development of hotel properties under the aerocity project allegedly without paying the service tax on the fees collected from them, they said.

When contacted, DIAL denied any charge of service tax evasion and said they were examining the show cause notice issued to them.
"We wish to clarify that there is no question of evasion of service tax as service tax was not applicable on advance development cost paid by the developers for the development of common infrastructure.
"We are in the process of examining the show cause notice along with our legal counsels and will take appropriate legal action. We believe that we have a strong case on merits and expect a favourable outcome," a DIAL spokesperson said in his response to a PTI query.

A case of alleged service tax evasion was registered by the DGCEI in August this year. Following which the officials had also quizzed certain DIAL personnel in this regard, the sources said.
In a communication to DIAL, the Service Tax Commissioner, Delhi said that service tax is applicable on the development cost charged by the DIAL, the sources said.
DIAL is a joint venture consortium of GMR Group, Airports Authority of India, Fraport and Malaysia Airports Holdings Berhad.