Arindam Chaudhuri, director of Indian Institute of Planning and Management (IIPM) has been arrested by the CGST South Delhi Commissionerate. Arrest has been made on an alleged undue claim of CENVAT of service tax credit of about Rs 23 crore.
He was arrested by the Central Goods & Services Tax (CGST) South Delhi Commissionerate under Section 89 of the Finance Act which enlists penalties for evading payment of service tax.
Chaudhuri faces charges relating to an alleged undue claim of Central Value Added Tax (CENVAT) of service tax credit of about Rs 23 crore.
Gurudas Malik Thakur, who is the Director of the company, has also been arrested under the same offences and sent to 14 days’ judicial custody.
The arrest was made over irregularities in IIPM balance sheet. He allegedly made a credit entry of nearly Rs 23 crore after facing a cash shortfall to pay the service tax.
He showed this amount in next year's balance sheets, but this was never paid.
Brief About Sec 89 of the Finance Act
Whoever commits any of the following offences, namely
89(1)(a) knowingly evades the payment of service tax under this Chapter
89(1)(b) avails and utilizes credit of taxes or duty without actual receipt of taxable service or excisable goods either fully or partially in violation of the rules made under the provisions of this Chapter
89(1)(c) maintains false books of account or fails to supply any information which he is required to supply under this Chapter or the rules made there under; or supplies false information
89(1)(d) collects any amount as service tax but fails to pay the amount so collected to the credit of the Central Government beyond a period of six months from the date on which such payment becomes due
shall be punishable
1) in the case of an offence where the amount exceeds Rs. 50 lakh: with imprisonment for a term which may extend to 3 years. However, in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for a term of less than six months.
2) in any other case, with imprisonment for a term which may extend to 1 year.
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