Service Tax Notice to Mumbai Police
IF CISF can be taxed, why not Mumbai Police, which also provides security service to several individuals and organisations? The Mumbai Service Tax-I Commissionerate has issued a notice to the mighty Mumbai Police demanding Service Tax.
According to the Service Tax Commissioner Sushil Solanki, Police department was requested to provide data for value of such services number of times including by DO letters to Commissioner of Police and to State Government officials but they did not respond. Therefore, value has been taken on estimated basis under Section 72. In fact, they were issued a Show Cause Notice in the past about 5-6 years ago, which was dropped because erstwhile definition used the words service to be provided by 'a commercial concern'. But, by an amendment in 2006, said word was substituted with 'any person', hence Police Department is also required to pay service tax. In fact, this legal position was also mentioned in earlier order passed by then Commissioner. This fact along with clarification issued by department that police organization are required to pay service tax was also clarified to them in writing but still they did not provide information. Hence, value available for past period was enhanced and accordingly Show Cause Notice has been issued for 2006 to 2011.
Will they impose a hefty penalty on Mumbai Police?
Many other State Police organisations might be providing security services on payment and the Service Tax Commissioners in those states can also take a leaf from Mumbai Service Tax and issue notices to their respective Police forces.