Public sector airline Indian, SAP India and Hindustan Petroleum Corporation (HPCL) have come under fire from Directorate General of Central Excise Intelligence for non-payment of service tax.
DGCEI had found service tax evasion to the tune of over Rs 50 crore by these companies during April-July 06. In the case of Indian (erstwhile Indian Airlines), which has a liability of Rs 27.30 crore, DGCEI found that it was receiving services of ticketing, reservation, passenger care, maintenance and repair service from various global service agents located overseas. Such services, received by a person who has an establishment in India, have become taxable.
The case is pending further investigation. Bangalore-based SAP India was found guilty of non-payment of service tax to the tune of Rs 25 crore. SAP India has signed a franchisee agreement with its parent company situated outside India and was receiving franchisee services from the parent.
While SAP was liable to pay service tax, it did not do so even after summons. After a probe was launched, the company voluntarily deposited Rs 14.96 crore. The case is being further investigated now. HPCL was found not paying service tax under the category of goods transport agency with effect from January 1, 05.
The company had taken a service tax registration. After initiation of investigations, the company voluntarily paid the entire tax liability of Rs 4.49 crore.