By TIOL News Service

NEW DELHI, FEB 01, 2014: AS promised by the Revenue Secretary that the Department has specific intelligence about service tax evaders, as soon as the VCES came to an end, the CBEC field formations have swung into action. Across the country, arrests are being made for having collected service tax but not deposited the same.

Among all the evaders there is one Section that stands out is the Real Estate. In the latest case the Mumbai Service Tax-I has arrested a partner of M/s Orbit Enterprises and Director of Midcity Infra Pvt Ltd. They have been alleged of evading tax to the tune of over Rs three crore. And this is after taking advances from buyers.

As per the Press Release issued by the Commissioner, Mr Sushil Solanki, the demand pertains to the period of 01.1.2013 to 31.12.2013. During this period the said builder was constructing prominent complexes like INS Tower at Bandra Kurla Complex, Commercial site known at Kshitij at Vira Desai Road, Andheri(West) and also redevelopment projects of MHADA at Adarsh Nagar Society and Samrat Ashok Chakravarti Society at J.B. Nagar, Andheri(East). This group was collecting the advances from its buyers but was not paying the Service Tax dues to the Department and was using this evaded tax money for its own business purposes.

This construction group has allegedly also not paid the Service Tax from July 2010 onwards when the levy of Service Tax on construction activities carried out by the builders was brought into effect. For that, the group has filed declarations under the VCES amounting to Rs 7 Cr. However, the current liability of Rs. 3.06 crores is in addition to the amount declared under the VCES Scheme.

The investigations and sustained interrogation carried by the officers could reveal the Service Tax evasion. Upon confirmation, the department immediately took strict action and arrested the Partner of M/s.Orbit Enterprises and Director of M/s. Midcity Infrastructures Pvt. Ltd. yesterday and was produced before the Esplanade Court today.

Mr V. S. Krishnan, Chief Commissioner of Central Excise and Service Tax, Mumbai-I has alerted the tax payers that the department is analyzing the tax payments of the service providers and have identified the major tax evaders.

Recently the Department has arrested persons from M/s. Talwalkar Fitness Solutions Pvt. Ltd. and also M/s. Captain Facility Pvt. Ltd. The bail applications were rejected by the Court and he is in judicial custody from 17th January 2014.

Service Tax Department therefore suggests and cautions all tax payers who have not paid Service Tax to pay tax along with interest immediately, failing which, further action will be taken by the Department. Department is also attaching bank accounts of various Companies who have not paid taxes in time.