Adani, IIMA among 94 firms issued service tax notices

The serive tax commissionerate, Ahmedabad, has sent show-cause notices to 94 companies, including Adani and Torrent Power and also premier Indian Institute of Management, Ahmedabad (IIMA), asking them why service tax amounting to Rs100 crore should not be collected from them.

The commissionerate said a recent auditing had found that this amount was due on them and so it has demanded that this amount be paid.

According to highly placed sources, the 94 companies include Adani’s Mundra Port and SEZ and Adani Energy, Torrent Power, BSNL, IIMA, Chitra Publicity, Shyam Builders and Shah Investors.

“We have raised our demand based on the audit in which we found many suspicious things related to service tax evasion. These companies have been asked to give reasons why they should not be taxed,” said a top official.

“It’s not that these companies were not giving taxes but during auditing we found several loopholes. We came to know that the amount of taxes they were paying actually doesn’t match their actually earnings,” he further stated.

In case of IIMA, the service tax department has demanded Rs1.39 crore. “This is based on the logic that the institute runs several short-term courses for professionals besides the regular post-graduate programmes. Hence, the institute needs to pay service tax,’’ said sources.

However, what may come as a respite for these companies is the fact that they can fight against the notices. It is not necessary that all of them will have to pay the amount the department has asked for — the companies can cite their arguments against the tax claim.    

"This is a normal procedure that we follow. During the auditing of tax pattern filed by these companies, we found out that there are many areas which have fallen into the criteria where service tax is applicable. It is our findings and if companies have any objection they can raise their concerns," said another senior official.