Case Study Related To Service Tax

The Directorate General of Central Excise Intelligence (DGCEI) has detected two cases of tax evasion by Cadbury India, the Minister of State for Finance, S.S Palanimanickam, said in a written reply in Rajya Sabha on Thursday.

The Minister said, “two cases of tax evasion by Cadbury India Ltd have been detected by DGCEI during the years 2009-10 to 2012-13, up to October 31, 2012.”

One case is related to evasion of Central excise and the other is concerned with evasion of service tax. He said Central excise duty evasion by the Baddi (in Himachal Pradesh) unit of Cadbury India was detected in 2011-12. It involves evasion of approximately Rs 200 crore. The matter is under investigation, Palanimanickam said. The other case, related to service tax evasion of Rs 13.43 crore by Cadbury India, Mumbai, has been adjudicated and a demand of Rs 11.75 crore was confirmed along with a penalty of equal amount.

He said Rs 12.08 crore tax with Rs 0.53 crore interest was realised during investigation.

In response to the Finance Ministry’s answer, a Cadbury India spokesperson said, “A compliant and ethical corporate culture, which includes adhering to laws and regulations in the countries in which we operate, is integral to our success. To that end, we are fully co-operating with the authorities on this enquiry. Since the investigation currently is under way, it will be inappropriate on our part to discuss the details at this time.”

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Goods and Services Tax .uestion / 0+1, +1 and 0+23t the end of 3pril 4' 0ive in 1eace 0td (50+15) purchased a derelict commercial buildingin $otany for %#! million# The transaction was 6ero7rated because 0+1 is registered for GST on amonthly basis and intended to carry out a ma*or re7fit and lease the building to commercialtenants# 0+1 has a 8 2arch balance date and is registered on an invoice basis#+n 9une 4' 0+1 decided that building a retirement village would provide a much higher returnon investment# 0+1 therefore instructed an architect in 9uly 4' to draw up plans to convert the building into !'' apartments and to name it 5the +1 building5#+t is also envisaged that the retirement village would have landscaped gardens and a communitycentre, including a lounge, nursing station, theatre, library, gym, heated swimming pool, boxingring and $owling Green#+n :ebruary 4'! 0+1 applied for a building consent to convert the building into '' apartments#+t is envisaged that the apartments would be identical and each of the apartments is euippedwith an emergency call system# The ;ouncil issued the building consent in 9uly 4'!#<nce the development has been completed, it is envisaged that a license would be granted toresidents to live in an apartment and to use the common areas and facilities#esidents would be entitled to select between two care pac=ages# +f residents selected the5independence5 pac=age they would not pay for and receive additional services such as mealsor cleaning services# 3 nurse would however visit residents in their apartments at least twice ayear to assess medical needs#

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