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Indian Tax Authorities Focus On Kingfisher Again

by Mary Swire, Tax-News.com, Hong Kong

14 August 2013


The Indian tax authorities may seek to prosecute Kingfisher Airlines boss Vijay Mallya as the row over alleged service tax evasion continues to rumble on.

The Service Tax Department impounded two Kingfisher airplanes last December, claiming that the carrier had failed to settle a INR1.9bn (USD31.4m) tax bill. In the latest twist, Lipka Majumdar Roy Chowdhury, a member of the Central Board of Excise and Customs, has told reporters that a commissioner will decide whether to take action against Kingfisher's owner Mallya.

Chowdhury added that commissioners were "trying their best to recover the amount and some amounts have been recovered." However, there remain "several show-cause notices which are in the process of adjudication."

Under changes introduced in this year's Finance Bill, the authorities can arrest an individual for the non-payment of collected service tax. A Service Tax Voluntary Compliance Encouragement Scheme (VCES), launched in May, aims to encourage the disclosure and payment of any outstanding Service Tax for the period from October, 2007 to December, 2012. According to Finance Minister P. Chidambaram, the VCES offers a one-time "golden opportunity" to take advantage of a "no penalty, no interest" amnesty. To date, 1,400 of the estimated 1m Service Tax defaulters able to access the scheme have filed declarations, bringing in INR6.5bn in revenue.

TAGS: compliance | Finance | tax | tax compliance | India | tax avoidance | interest | revenue guidance | ministry of finance | tax authority | revenue statistics | tax reform | Compliance

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