Daijiworld Media Network - Mangaluru

Mangaluru, Aug 6: Officers of the Commissionerate of Central Excise and Service Tax, Mangaluru, have arrested the proprietor of a rent-a-cab service for evasion of service tax of about Rs one crore, states a press release from the Commissionerate.

However, the Commissionerate has not revealed the name of the arrested person, nor the name of the firm.

The firm provides vehicles on rent to several major companies of Mangaluru, states the press release.

Based on credible intelligence, the officers had initiated investigation against the firm. "The service provider had filed nil tax returns for the last two-and-a-half years, although he had received consideration to the tune of several crores towards provision of services," the release states.

"The invoices raised by them had an endorsement to the effect that the service receiver had to pay service tax of 40 percent of the total value of the service. The relevant notification also stipulates that the service provider has to discharge service liability on the balance 60 percent of value. The service provider has admitted to the contravention that he failed to discharge tax liability thereby knowingly evading the payment of service tax," the Commissionerate stated in the release.

The investigation conducted so far prima facie revealed that the service provider has committed an offence punishable under Sec 89(1)(a)(i) of the Finance Act, 1994 by knowingly evading payment of service tax. Accordingly, the proprietor was arrested under Sec 91 of the Act, said the Commissionerate.

As the offence is non-cognizable and bailable, he was released on furnishing bail bond and surety, and also subject to conditions including payment of duty evaded in specific time frame.

Further investigation is under progress.