September 23, 2015
Directorate General of Central Excise Intelligence, Chennai Zonal Unit, has arrested a Director of a Chennai-based company, providing IT Software services and Internet Communication service, for failing to remit service tax.
The company has collected service tax of Rs. 2.94 crore from 2010-2011 to 2014-2015and not remitted the amount to the Government Exchequer.
Officials of DGCEI conducted search at the office premises of the service provider and seized certain documents.
Upon perusal of the invoices raised by the service provider and other documents, it appeared that the service provider has charged and collected service tax from their clients from 2010-2011 onwards but not credited the service tax so collected to the credit of the Central Government in contravention of Section 73(A) of Finance Act 1994.
On enquiry, the Director has admitted that their company had collected, but not paid service tax liability of Rs. 2.94 crore for the period up to March 2015 towards Information Technology Software services and Internet Telecommunication Services to the account of Central Government, a release from Additional Director General, A.K. Singh said here.
In addition, the service provider has not filed statutory ST-3 returns for the period 2013-14 and 2014-2015 with the Department till date.
As per Section 89(1)(d) (ii) of the Finance Act, 1994 who ever collects service tax in excess of Rs.50 lakh but fails to credit the same to the Government Account within a period of six months from the day on which such payment becomes due is liable for imprisonment for a term which may be extended to seven years.
Such offences shall be cognizable as per Section 90 of the Act.
The service provider was therefore arrested yesterday under the provisions of Section 91 of the Finance Act, 1994, and was produced before the Additional Chief Metropolitan Magistrate–EO II Court, Chennai, who remanded him to Judicial Custody, the release added.