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Officials cracking down on service tax evaders

Special Correspondent

Service providers urged to pay tax voluntarily

Bangalore: The Union Revenue Department is on the prowl to check evasion of service tax by service providers. A host of corporates such as Wipro-GE Medical, IBM Global services, TNT India, Air India, Jet Airways, Indian Airlines, ONGC Videsh, IIPM and Karnataka State Tourism Development Corporation are being investigated for non-payment of service tax, says K.P. Singh, Director-General, Service Tax, Union Finance Ministry.

Under adjudication

The department has slapped a service tax claim of Rs. 3 crores on Wipro-GE Medical for the period July 2003 to December 2004 for maintenance and repairs of hardware as well as providing software services to clients. "Out of this, Wipro-GE Medical has paid an interim amount of Rs. 59 lakhs. The balance has to be confirmed by the adjudicating authority," he said.

Air cargo and express courier firm TNT India Private Ltd. has run up a service tax liability of Rs. 3 crores from March 15 to June 15 this year.

IBM Global Services has incurred a service tax liability of Rs. 1.41 crore on providing ERP services.

"The investigation against IBM is over, and the order for recovering unpaid service tax from the company will be soon issued by the investigating authority," Mr. Singh said. Training institute IIPM owes Rs 2.2 crores towards service tax in Bangalore alone and its liability throughout the country is put at Rs 23 crores. Both IBM and IIPM were issued show-cause notices on November 7 for non-payment of service tax, Mr. Singh said.

Service providers such as airlines and banks providing MICR facility and online data services and firms providing IPR services are also on the list of entities that have not paid service tax.

The department is seeking to collect about Rs. 100 crores from Air India.

It is also holding discussions with other airlines such as Indian Airlines and Jet Airways for recovering unpaid service tax for providing Computer Reservation System (CRS) services to passengers through third-party service providers abroad such as Galileo.

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