Collects Rs. 1 crore as service tax from his clients for over 20 months.

Customs, Central Excise and Service Tax (CCEST) Department officials arrested a businessman in the city for not remitting service tax collected from his clients to the government. The officials produced him before 3 Metropolitan Magistrate on Thursday, who sent him to 14 days judicial remand.

Assistant Commissioner B. Gandhi said ABC Engineering Works managing partner Gajula Venkateswara Rao had collected Rs. 1 crore as service tax from his clients. He did not remit the same to the department for the last 20 months, which is an offence under Finance Act, 1994. The punishment could be up to seven years imprisonment.

Mr. Gandhi said taxpayers would attract provisions of the Finance Act if he/she collect more than Rs. 60 lakh towards tax but do not remit the same to government within six months. The department could attach bank accounts and properties apart from arresting the accused. There could be some more persons who have not remitted tax, he said and warned of action if they failed to pay their dues before March 31.

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