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Mumbai Service Tax Audit detects & Emirates Airlines quickly pays Rs 175 Crore; Saudi Airlines earlier paid Rs 130 Cr

By TIOL News Service

MUMBAI, OCT 12, 2013: SOME experts recently said that service tax is a 'lapse-friendly' tax, which needs intelligent study for flawless compliance. No matter how big a commercial enterprise is and there may be dozens of taxation personnel handling this tricky levy, something is likely to go amiss. And this is what was detected by the Audit Team of the Mumbai Service Tax Commissionerate in the case of highly reputed Emirates Airlines. As per the detection records, the Airlines completely missed to pay tax to the tune of Rs 175 Crore and once the same being pointed out, they promptly deposited the same in the Government's account.

As per the Press Release issued by the Commissioner, Mr Sushil Solanki, their audit team recently studied the books of the airlines and found that they have not paid service tax for the passenger who embarked from different airports in India for destination in foreign country. As per the law, there is no dispute about payment of service tax on such journey.

On verification of record, it was noticed that they did not pay the service tax on the said journey. The differential service tax along with interest for the period 2008-2013 works out to more than Rs.175 crores. On realizing their mistake as pointed out by the officer, they paid Rs.175 crores as service tax on 10.10.2013.

Regarding the rate of interest, department is of the view that they should have paid @ 24% in terms of Section 73B of the Finance Act. Department is verifying the similar aspect from other airlines also.

Service Tax-I department has recently detected major cases of other airlines also. Like in the case of Saudi Arabia, they have also paid more than Rs.130 crores in the month of March- April 2013 on account of non-payment of service tax for Haj passengers. Department is also closely watching the defaulters who had not paid their monthly dues in time and have been attaching their Bank Accounts .


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