OSL and K1 Security tops service tax evasion chart in Odisha

Bhubaneswar, 31/8 : The service tax evasion in the state will continue to be a worrying factor despite the growth in the collection in the service tax collection. While the real estate industry continues to dominate the evasion chart, the Orissa Stevedoers Ltd of Cuttack and K1 Security Services of Bhubaneswar the two top evader for the last fiscal.
In information provided by Central Excise, Customs and Service Tax authority under RTI Act, the tax authorities have found 12 big defaulters of service tax. Apart from OSL and K1 Securities, others names are Santoshi Electricals, Arundhati Infratech, Coastal Constructions, PGS Projects, Sibaram Sahu and Brothers, Divine Constructions, Behera Engineering, Aditi Enterprises, Maa Tarini Security and Tech Support. Of these defaulters, while five are from Bhubaneswar, three from Cuttack, two from Paradeep and one each from Puri and Berhampur.
While Vodafone Spacetel was the lone service tax evader in 2013-14, in last fiscal no telecom company was in the list. Apart from the telecom industry, hotel industry is also the prime omission from the list. In 2013-14, while four top hoteliers including Sandy Resorts and Arya Palace were featured in the top 20 defaulters, no hotel industry representative is featured in last fiscal.
It may be recalled that audited service tax evasion in Odisha stood at Rs 484 crore this year which is similar to last year’s figure of Rs 502 crore due to the lack of punitive action against defaulting companies or organisations. The industry experts feel that the toothless action against these defaulting units gives confidence and will be detrimental in the long run.
Customers pay for Indirect Tax like Service Tax, Central Excise and Customs duty at the time of purchase of goods and services. It is important that the top service tax evaders are still evading arrest despite the provision made in 2013 which gives power to the authority to arrest without any court order after the defaulting amount crosses Rs 10 crore.
The department is focusing on increasing the assessee base. The department is now focusing on adding small establishments to the tax net which will contribute to 35% of the service tax. According to market watchers, the tax officials have been lenient on the big tax defaulters like OSL. According to them, nearly 20 big companies in Odisha have defaulted more than Rs 170 crore while the small units have defaulted the similar numbers. However, number of these small companies is very high.