Service Tax Department has started arresting tax defaulters

Net4 India Ltd Managing Director Jasjit Singh Sawhney has been arrested by the Service Tax department for alleged downloadnon-payment of the levy to the tune of Rs 9 crore.  The report suggests that Sawhney was arrested by Service Tax department officers on August 30 for the company’s pending liability of about Rs 9 crore for the financial year 2012-13, and later was granted conditional bail by a local court until September 3. The company has already paid Rs 25 lakh and has to pay Rs75 lakh within 15 days. Further, Rs 1 crore a month has to be paid subsequently, the official added.   The service tax department officials insists that a major chunk of this liability has been collected by the company from its clients as service tax to be paid to the government exchequer, but was not deposited with the government. It is important note that the Finance Bill 2013 has given power to the Service Tax Department to arrest any person who has collected service tax of more than Rs 50 lakh and fails to deposit the amount with the government even six months after the due date can be imprisoned for up to seven years.  It has also proposed to make at least four offenses non- bailable under Section 135 of the Customs Act. This would include import or export of any goods which have not been declared in accordance with the provisions of this Act and the market price of which exceeds Rs 1 crore. Also, if a person fraudulently attempts to avail of drawback or any exemption from duty provided under Customs Act, if the amount of drawback or exemption from duty exceeds Rs 50 lakh, it would be non-bailable offense. Service tax has emerged as a major source of revenue and the government proposes to collect Rs 1.8 lakh crore in the current fiscal, up from Rs 1.3 lakh crore last fiscal. In this regard, in exercise of power, Service Tax Department has started arresting tax defaulters . This is the third arrest this fiscal by the department for failure to deposit service tax collected from customers. Earlier, one person was arrested in Kolkata for non-payment of the levy to the tune of Rs 79 lakh and one person was held in Mumbai for dues of Rs 1.96 crore. At, we provide comprehensive tax and regulatory compliance services. Please feel free to call us at +91 8820820811 and press (5) Or drop an email at – You can also visit our tax and regulatory page for more on this.