CHENNAI: The director of a manpower supply firm in Alandur was arrested after the company evaded service tax of `5 crore.
G Ravindranath, commissioner of service tax, said the firm, which supplied manpower to various companies, had been avoiding paying to the exchequer the service tax collected since 2012.
Not only that, it floated dummy entities as sub-contractors and created fake invoices to avail of input tax credit fraudulently. The firm had been given several chances to comply after the case was probed by Survey, Intelligence and Research wing of the department but it did not respond.
The director was produced before the additional chief metropolitan magistrate, Economic Offences Court, Egmore, and remanded in judicial custody till April 6. “The offence is grave and entails a jail term of up to seven years,” said Ravindranath.
The commissioner also warned tax defaulters, who had been dodging summons, that his department was taking legal recourse in all cases of deliberate and willful disobedience.