Vijay Mallya faces prosecution for not paying service tax arrears

New Delhi: The indirect tax department on Thursdayhinted that Vijay Mallya, owner of the grounded KingfisherAirlines, may face prosecution in a service tax evasion case.

The grounded airline owes about Rs 190 crore to theservice tax department, of which Rs 127 crore is underlitigation as of December 2012.

Even thoughMallya’s company has charged service tax from its customers, it was not paid to the government.

[caption id=“attachment_1022225” align=“alignleft” width=“380”]  Vijay Mallya[/caption]

“Prosecution is definitely a provision there in the Act.And that decision of taking action on Kingfisher owner for notpaying service tax arrears will be taken by the concernedcommissioner,” said Lipika Majumdar Roy Chowdhury, member of theCentral Board of Excise and Customs.

“The commissioners are trying their best to recover theamount and some amounts have been recovered. But there wereseveral show-cause notices which are in the process ofadjudication,” she said after Finance Minister P Chidambaramreleased a booklet on frequently asked questions on avoluntary compliance encouragement scheme for service tax.

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Section 91, which was incorporated in this year’s Finance Bill, provides power to arrest a person for non-payment of collected service tax by an officer not below the rank of Superintendent of Central Excise. The Bill, which was passed on May 10, imposes a penalty on a person or company liable to pay service tax and fails to take a registration number from the government. Last year, the service tax department had seized three aircraft of Kingfisher Airlines, including a 62-seater ATR, for non-payment of dues.

PTI