Tax sleuths search Andhra Pradesh, Telangana beverages offices

HYDERABAD: Central excise sleuths on Friday searched the offices of the AP & Telangana Beverages Corporation Limited in Hyderabad and examined the records to enquire into suspected tax evasion. After the preliminary scrutiny, tax sleuths estimate that since 2012 till date, the two state governments and the corporations together have to pay about Rs 900 crore service tax dues.In this regard, notices are to be served to the state governments and beverages corporations in a week’s time.
A team of sleuths operating under the supervision of commissioner, service tax, Hyderabad, Sunil Jain, landed at the prohibition & excise complex in Nampally where the AP and TS BCL offices are located. The sleuths carried warrants to conduct searches at the two BCL offices but as the officials of the beverages corporation agreed to fully cooperate, they did not execute the warrants and began examining the records.
During the day-long operation, the sleuths collected copies of the relevant records of the beverages corporations from the year 2010 for scrutiny.
After the preliminary scrutiny, on Friday, the investigators estimated that from 2010-12, the united AP state has to pay about Rs 500 crore as service tax at 10.3 per cent value of the services provided through APBCL. For the period from 2012-2015, APBCL has to pay about 400 crore service tax at 12.36 per cent rate. Since June 2015, the service tax levy percentage increased to 14. “The amount of service tax the two BCLs have to pay after the state bifurcation reduced drastically as the two corporation began paying high amounts of VAT,” said a top official. When contacted, service tax assistant commissioner R Kalyan, who led the inspection team, refused to comment about the searches.
The tax sleuths are slated to visit the BCL offices again on Saturday. Once the scrutiny is over, notices will be served to the governments of the two states directing them to clear the tax dues. As per section 89 of the Finance Act, 1994, central excise sleuths can arrest a person if he or she evaded tax payment of more than Rs 50 lakh knowingly.