Telecom firm's CMD arrested for alleged service tax evasion

The Chairman-cum-Managing Director (CMD) of a telecom firm here has been arrested for allegedly evading service tax of about Rs 32 crore.

PTI| Last Updated: Mar 20, 2014, 16:22 PM IST

New Delhi: The Chairman-cum-Managing Director (CMD) of a telecom firm here has been arrested for allegedly evading service tax of about Rs 32 crore.

A case has been registered against Tulip Telecom Ltd for non-payment of service tax, official sources said.

Investigations by Delhi Service Tax Commissionerate found that the firm, which is engaged in providing Internet services among others, was not filing its mandatory returns of the central levy from 2012-13, they said.

Service Tax Commissionerate officials here arrested Lt Col (Retd) H S Bedi, CMD of Tulip Telecom Limited on Tuesday on charges of non-payment of tax even after collecting it from its consumers, the sources said.

The estimated alleged service tax evasion by the company is Rs 32.16 crore, they said.

Phone calls and emails seeking the firm's comment did not elicit any response.

Bedi, who was produced before Patiala House Court here yesterday, has been sent to judicial custody for 14-days.

An evasion of service tax of Rs 50 lakh and above has been made a cognizable offence after the passage of 2013-14 Finance Bill on May 10 last year.

Finance Minister P Chidambaram had proposed provisions of Criminal Procedure Code (CrPC) to arrest such offenders in 2013-14 budget, in line with customs and central excise laws.

Earlier, the officials did not have any power to arrest a person for service tax evasion.

The service tax officials are taking strict action against all evaders after a first-of-its-kind amnesty scheme for such defaulters ended in December last year.

The Voluntary Compliance Encouragement Scheme (VCES) was implemented from May 10 last year to allow a service tax defaulter to pay dues without any penalty or late payment charges and under the scheme, a person was to make a declaration before a designated authority on or before December 31, 2013.