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Videocon group official arrested for service tax evasion

Press Trust of India  |  Mumbai 

The Service Tax Department today arrested an accounts manager with Evans Fraser & Company, a Videocon group firm which is in property renting, for allegedly forging documents, leading to a tax loss of Rs 1.54 crore.

"We have arrested Nagaraj Kotwal of Evans Fraser, an associated group company of Videocon, for forging a stamp paper for renting out a property to the group company Next Retail," Service Tax Commissioner Sushil Solanki told PTI.

After the company paid the dues, Kotwal was released on bail, Solanki added. When contacted, Videocon Group chairman Venugopal Dhoot told PTI that the company made the payment, but denied that Kotwal had been arrested.

Next Retail is the organised retail arm of Videocon.

Evans Fraser is engaged in property renting and has availed of and utilised inadmissible 'Cenvat credit' using fraudulent methods like forging a stamp paper on which agreement was entered between EF and Next Retail India, Solanki said, adding that investigation was on to find out if any other person was involved.

Cenvat credit is a scheme wherein a manufacturer or the output service provider is allowed a set-off of the tax paid on the inputs or the input services that are used while manufacturing the final products/service.

"An agreement showing date of execution as 18.01.2008 was written on a stamp paper purchased in August 2013. An enquiry to the treasury office revealed that the stamp paper was issued in August 2013 but both the companies showed that agreement was entered into in January 2008," said additional commissioner of service tax Satish Dhavale.

Dhavale added that the intention of both the companies was to misinform the department and avail of inadmissible Cenvat credit of Rs 1.54 crore.

Sources in the department also said Next Retail issued invoice of Rs 15 crore on Evans Fraser for providing maintenance and repair services but in fact no service was provided.

First Published: Wed, April 23 2014. 19:11 IST