Arresting Guidelines in Service Tax
PERHAPS, after the tumult caused by the momentary setback [Please see and ] in the cases of Make My Trip.com - and Ebiz Com - , the Board felt it prudent to once again advise its officers about the arrest provisions and so have come out with a fresh Circular.
The CBEC refers to the amendments made to sections 89, 90 and 91 of the Finance Act, 1994 by the Finance Act, 2016 (w.e.f 14.05.2016) and informs that as a consequence of these amendments, the power of arrest in Service Tax is available only if a person collects any amount as service tax but fails to pay the amount so collected to the credit of the Central Government beyond the period of six months from the date on which such payment becomes due and the amount exceeds rupees two crores.
The Board reiterates from its earlier Circular dated 17.09.2013 the conditions precedent, both legal and factual, while carrying out arrests and also informs that - If the alleged offender is assisting in the investigation and has deposited at least half of the evaded tax, then the need to arrest may not arise.
Central Excise Circulars No. dated 17.09.2013 and dated 23.10.2015 stand amended accordingly. The Circular No. dated 23.10.2015 is rescinded.
The Board emphasises - It is again reiterated that arrest and prosecution should not be resorted to in cases of technical nature i.e. where the additional demand of duty/tax is based totally on a difference of opinion regarding interpretation of law.
With GST round the corner, it is time to set things right.
Circular dated September 30, 2016