Customs officials have arrested C Vijay Shekhar Reddy, chairman and MD of Vijay Mining & Infracorp Pvt Ltd, on the charge of collecting service tax to the tune of Rs 20 crore and not remitting the same to the department.

The arrest came after the amnesty period under the Voluntary Compliance Encouragement Scheme (VCES) for those who never filed their service tax returns and those who stopped doing so, ended on December 31, 2013. tnn

According to M K Singh, commissioner, Customs, Central Excise & Service Tax, Hyderabad II Commissionerate, Vijay Shekhar Reddy admitted to evading service tax exceeding Rs 20 crore. The company also filed VCES declaration for some period and defaulted on payment of 50% of the declared amount. Investigations are on to arrive at the correct service tax liability of the company. After his arrest for cognizable offence under section 89(1) (ii) of Finance Act, 1994, he was produced before the special judge, economic offences court, Nampally.

Interestingly, as per the official sources, this is perhaps the first arrest in the series to comprise of hundreds of such defaulters. Service tax department said they got the green signal from none other than the top brass in the Finance Ministry allowing the Hyderabad officials to launch the strictest of the actions including arrest and immediate recovery of the money by attaching property and/or bank accounts.

Hyderabad has recently witnessed arrests of some non filers in construction companies, multimedia companies and security agencies etc. Some of these were not depositing the service tax collected from customers with the department. These cases are dealt as 'deliberate and criminal evasion'. Apart from these kind of evaders, there are thousands others who are yet to get registered with the department while scores others have stopped filing the service tax returns. But after the lapse of VCES on December 31, 2013, the Department has finally come down massively upon these evaders.

Service Tax wing of the Central Board of Excise and Customs has reportedly got exhaustive lists from special Anti-Evasion teams for non-filers/ stop-filers and non-registrants. Amongst those defaulting or evading on payment of Service Tax are the renting sector, construction and IT related services, theatre owners and exhibitors etc.