Top Tax Advisory Firm Ernst & Young and its associates booked by service tax department and issued Show Cause Notices for Service Tax evasion of over Rs. 8 Crores
October, 26th 2007
Ernst & Young is advising over 400 MNCs on service tax matters.MNCs before floating their operations in India, give a global mandate to one of the Big 4 Consulting Companies for providing them Tax Advisory Services and sign a contract with them for receiving their advice at a rate up to Rs 20000/- Per Hour spent by their Consultants on their assignments.Even telephonic discussions are charged at per minute rates.
The investigations were conducted under close supervision of dynamic Commissioner of Service Tax Delhi Mr VK Garg whose guidance resulted in detection of service tax evasion of Crores by Big Consulting Companies; many of which have voluntarily paid service tax. Though such cases are normally booked by Directorate-General of Central Excise Intelligence which has all-India jurisdiction and has superior infrastructure; the credit goes to Mr VK Garg and his team for booking this case having all-India ramifications.
On the basis of information collected by the Delhi Service Tax Commissionerate, investigations were initiated and Ernst and Young was put under service tax scanner.After investigations M/s Ernst and Young and its associate entities were found to be liable to pay service tax as recipient of services from outside India under Rule 2(1)(d)(iv) of Service Tax Rules, 1994; Section 65(105) explanation and Section 66A of the Finance Act, 1994.
M/s Ernst and Young have already paid Rs. 2.20 crores towards their Service Tax liability.
CAclubindia
