Will challenge Rs 135.72-cr service tax order: Blue Star

Air-conditioner and commercial refrigeration maker Blue Star today said it will challenge a Rs 135.72 crore service tax and penalty imposed on it at an "appropriate forum" saying it was a "patently erroneous" step by tax authorities.
The company has received an order from the Principal Commissioner of Service Tax-1, Commissionerate, Kolkata holding that there has been alleged short payment of service tax amounting to around Rs 67.86 crore during the period FY 2007-08 to FY 2011-12, Blue Star said in a BSE filing.
The Commissioner has also imposed penalty of Rs 67.86 crore equal to the tax demand under section 78 of the Finance Act, 1994 apart from interest (not quantified in the order) to be paid in terms of section 75 of the Finance Act, 1994 on the tax demanded, it added.

Blue Star, however, said: "The order is a complete departure from a ruling by the competent authority in an identical matter at another jurisdiction, in which after examination of the company's similar records, the demand notice raised by the Service Tax department was quashed."
It further said: "The Company will challenge the said order before the appropriate forum in accordance with law and is confident about a positive outcome."
Based on the advice received from its tax advisors, the company strongly believes that the said order apart from being patently erroneous, it added.