Rs9,800 crore service tax evasion detected, stern action on cards

Service tax evasion of a staggering Rs9,800 crore has been detected during the first nine months of the current fiscal, forcing the Tax Department to warn that properties of evaders will be attached.

"In many cases, the service providers collect service tax from their clients but do not deposit it with the government," said CBEC member (service tax) Lipika Majumdar Roy Choudhury.

Giving details of some prominent cases, she said the oil and gas sector has admitted liability of Rs150 crore, a construction services company Rs18 crore, a security services firm Rs86 crore and the pharmaceutical sector Rs28 crore.

"CBEC would appeal to all service providers to comply with the law and pay service tax that is due. Failure to pay service tax will attract appropriate action under law including recovery of tax, interest and penalty. Prosecution and attachment of property are also envisaged in appropriate cases," she said.

Roy Choudhury said the department has realised Rs2,000 crore during the current fiscal bringing down the service evasion amount to Rs7,800 crore.

The Central Board of Excise and Customs (CBEC) had detected service tax evasion of Rs5,000-6,000 crore in April-December period last fiscal.

Asked whether the department would be able to meet service tax collection target of Rs1.24 lakh crore for the current fiscal, she said, "I am hopeful that we will achieve the target."

During the first 9 months of the current fiscal, the service tax collections has witnessed a growth of 34%, she added.