Big 4 Consulting Company booked for allegedly evading service tax

Import of Ships (Vessels) & other moveable capital goods etc. if imported under SFIS Scheme of FTP and their installation, clarification thereof-DGFT Circular No.26 Public Company Accounting Oversight Board of US bars auditors affiliated with PwC SP Pulavarthi and Chintapatla Ravindernath for failure to detect multi-year fraud at Satyam Former Chief Commissioner of Income Tax Girish Dave to join KPMG as Senior Advisor Director-General of FIEO Ajay Sahai resigns Jaimini Sharma appointed as Member Secretary to Tariff Commission Reliance's Tax Advisor & ex-IRS Officer Sandeep Tandon dies of cancer Food inflation rises 16.3 per cent Sharad Pawar says prices of essential commodities coming down Haryana Assembly okays Special Economic Zone (Amendment) Bill, 2010, which seeks to provide for refund of stamp duty on registration of land collected from developers of SEZs in the state before notification of SEZ Authority for Advance Ruling rules the payments made to ABB Research Ltd., Zurich towards the applicant's share of the cost incurred in respect of R&D activities are not liable to be taxed under the Income Tax Act, 1961 as business income in the absence of permanent establishment in India, having regard to Art.7 of the Tax Treaty- Nor can it be subjected to tax as royalty or fees for technical services under Article 12 of the Treaty-AIT-2010-94-AAR Tariff Value for import of Brass Scrap is 3801 and for poppy seeds 4256-Customs Non-Tariff Notification No. 20 No approval for procurement of service “Rental” of immovable property for office outside the Special Economic Zone/FTWZ can be given-SEZ Instruction No. 49 on Clarifications on FTWZ issues Consolidated list of default authorized operations which can be undertaken by the developer/approved co-developer by default from the date of notification-SEZ Instruction No.50 Himachal Government hikes VAT from 4 per cent to 5 per cent on all items, except edible oils and foodgrains Authority for Advance Ruling rules no capital gains accrued or arose at the time of conversion of partnership firm into a private limited company under Part IX of the Companies Act and therefore, notwithstanding the non-compliance with clause (d) of proviso to Section 47(xiii) of the Income Tax Act, by reason of premature transfer of shares, the said company is not liable to pay capital gains tax-AIT-2010-93-AAR Authority for Advance Ruling rules if the purchasers are non-residents other than the applicant, the applicant is liable to pay tax in India on the amount received by it for the support services rendered through the branch office in India-AIT-2010-92 -AAR Jurisdiction of Dispute Resolution Panel-Income Tax Order No.3 Employment of washing process in the manufacture of agglomerates etc from imported plastic waste and scrap-SEZ Instruction No.48 Haryana Government imposes surcharge ranging from 0.25 per cent to 0.7 per cent on VAT Service Tax Notification No. 17/2010 which exempts the taxable service providing packaged or canned software, intended for single use and packed accordingly amended-Service Tax Notification No.18 Procurement, Import and Export of Prohibited and Restricted Goods by SEZ Units-SEZ Instruction No. 47 Authority for Advance Ruling rules the amounts received/receivable by Technopromexport from NTPC under contract for Offshore supply of all plant and equipment including mandatory spares are not liable to tax in India under the provisions of the Income-tax Act, 1961 and DTAA between India and Russia-AIT-2010-79-AAR

JUDGMENTS

CENTRAL EXCISE

CUSTOMS

exchange rate

SERVICE TAX

INCOME TAX

VAT

FINANCE ACTS

FINANCE BILLS

EOU STPI

SEZ

DGFT

RBI

NTT

RESOURCES

Email | Print

Big 4 Consulting Company booked for allegedly evading service tax

AIT News Network

NEW DELHI. Nothing could be worse news for a Big 4 Consulting Company, known as Top Tax Advisor to MNCs; and which claims to have hired a team of over 10 dozen “great” Tax Experts on Compensation ranging upto Rs 2 Crore Per Annum; itself being booked by the Service Tax Department for allegedly evading service tax which is said to be in the range of around Rs 10 Crore on various taxable services provided by it. Though the Company is advising over 200 MNCs based in India; who have signed a global mandate for Tax Advisory Services at the rates ranging from Rs 5000/- to Rs 20000/- Per Hour; through its offices located at Delhi, Gurgaon, Mumbai, Kolkata, Chennai and Bangalore etc.; the Company is said to be seeking Consultancy from outside Experts as the stake and the reputation involved are high.

· Several IRS Officers have also recently resigned and joined the said Consulting Company as Tax Consultant and have been hired on Packages which are said to be in the Range of Rs 25 Lakh to Rs 50 Lakh Per Annum.

· The efforts were made by Allindiantaxes to contact Mr VK Garg ,Commissioner of Service Tax, Delhi to ascertain the exact nature of investigations and allegations against the Big 4 Consulting Company but he was reported to be on leave. Mrs Sandhya Baliga Commissioner of Central Excise Delhi-II who is temporarily holding the charge of Commissioner of Service Tax was also not available for her comments on the development.

· Further, no Press Release has yet been issued by CBEC on the issue though the Top Brass of Finance Ministry has already taken a serious note of the development according to sources and it is contemplating issue of instructions to keep all Big Consulting Companies under Service Tax scanner. According to CBEC several Companies providing merger and acquisition advisory services are liable to pay service tax under notified taxable service of “Business and Management Consultancy” whereas only few companies are said to have paid service tax under the said category claiming that they are not Business or Management Consultant and thus , are not liable to pay service tax. Further, Royalty payment by MNC Companies to their Parents is also under the watch of service tax.

· Some Companies have already started soul searching and are doing in-house deliberation to voluntarily pay service tax along with the interest of 13 per cent on services rendered by them and not paid by them, before the service tax department knocks at their door with search warrant. But service tax department is going to rake in a moolah after investigations as aggregate gross billing of Big Consulting Companies is said to be over Rs 500 Crore. The cost of compensation paid by the Companies to their 300 odd Partners itself is between Rs 50 lakh to Rs 2 Crore per Partner. Even if a small percentage of the gross billing of the Companies is subject to service tax; the Revenue is going to garner a handsome figure without engaging any Consultant.