Mangaluru: Officers of the Commissionerate of Central Excise and Service Tax, Mangaluru arrested the proprietor of a rent-a-cab service for service tax evasion of Rs. 1 crore here, on August 6.
Based on credible intelligence, the officers had initiated an investigation against the firm providing vehicles on rent to several major companies of Mangaluru. 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 invoices raised by them had an endorsement to the effect that the service receiver had to pay service tax on 40% of the total value of service. The relevant notification also stipulates that the service provider has to discharge service tax liability on the balance 60% 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 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 the payment of service tax. Accordingly, the service provider was arrested under Sec 91 of the said act.
He was later released after furnishing a bail bond and surety of payment evaded in a specific time frame. Further investigation is under process.