Hyderabad: Even after excise duty and service tax were subsumed in the GST, Central Board of Indirect taxes and Customs (CBIC) would collect outstanding excise duty and service tax, which was evaded by traders as GST arrears.
The Hyderabad Zone has several entities, which had evaded service tax and excise over the last few years. After the rollout of GST, there was confusion as to how the evaded taxes will be recovered. Already close to 90 per cent of indirect tax asses-sees have migrated to GST.
Officials, however, say that showcause notices have been served on tax evaders and they have been told to appear before the commission.
“While we are recovering some of the evaded tax, businessmen are app-roaching courts to delay the process,” a source in the department said.
In the last two years, 400 tax evasion cases were found with respect to service tax alone. The officials, however, were successful in recovering Rs 175 crore.There are 66,000 business enterprises in Telangana, which were registered for service tax.
Tax evaders include Beverages Corporation Limited (BCL) of both the Telugu states, which did not pay Rs 1,800-crore worth service tax for the last three years.
While BCL officials argue that it is not required to pay service tax, tax officials insist service tax cannot be waived of since BCL was not a charitable group.
“The fact that it is extending services to distilleries, vendors by granting license fee is enough to attract the tax,” they said. The case is currently sub-judice and hence no amount was recovered.
The construction sector collectively is one of biggest service tax evader in the state. In case of excise duty, there were 72 tax evasion in last two years. Out of this, the officials recovered taxes from 50 per cent of evaders. However, Rs 135 crore is yet to be recovered.
