|
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.
|
on 23 June 2007 
Print
