CHENNAI: A city-based builder was arrested on Thursday by the service tax department on charges of not paying the service tax, despite having collecting the same from his customers. He, however, got reprieve from a court, which granted him interim bail only after he agreed to immediately pay Rs 50 lakh and Rs 1 crore by May 21, a statement from the department said.
While the statement did not name the builder, it said the builder, whose office is located at Teynampet had evaded more that Rs 2 crore of service tax since April 2011. This was despite him collecting the service tax from his customers. “The builder has been constructing commercial complexes and renting his immovable property to various customers and business entities. He had been collecting rental charges along with service tax amounts for providing such services. However, the builder has not been depositing the service tax collected with the service tax department and has been apparently using it in furtherance of his business, which is blatantly illegal,” said the statement from Ravindranath, commissioner of service tax.
As the builder failed to remit the service tax, he was arrested on Thursday by the service tax department.
When he was produced before the Economic Offences Court, the court granted him interim bail till May 21 on the condition of paying Rs 50 lakh of the pending tax immediately. The builder was also asked to pay Rs 1 crore by May 21.