The director of a Mumbai-based company was held here on Tuesday on the charge of evasion of service tax to the tune of Rs.92 lakh. This is the first arrest for service tax evasion in the State.
Salim Sheikh, director of Klass Kone Engineering Pvt. Ltd., was arrested by the Preventive Wing Headquarters of the Customs Department in Kochi under Customs Commissioner K.N. Raghavan on charge of evasion of service tax. His company allegedly did not pass on the service tax collected from customers to the government.
Customs officials said the Kochi branch of the company had evaded more than Rs.50 lakh in service tax. The company allegedly evaded a total of about Rs.92 lakh in service tax in its operations in other parts of the country. The 2013-2014 Union Budget had proposed that individuals evading service tax of more than Rs.50 lakh be arrested. The offence is punishable with up to seven years’ imprisonment.
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Dr. Raghavan said service providers who have evaded service tax could declare their taxes before December 31, under Voluntary Compliance Encouragement Scheme.