Failing to deposit service tax may attract arrest and imprisonment upto seven years

. With the passage of Finance Bill 2013 last week, the Revenue department officials can now arrest a person for non-payment of collected service tax.
Earlier, the officials did not have any power to arrest a person for service tax evasion. Besides, director and manager of a company who fail to pay collected service tax can now be arrested with imprisonment for upto seven years in addition to the penalty which may extend to Rs one lakh.
This is for the first time that service tax rules have been amended to attract the Criminal Procedure Code ( CrPC) in line with customs and central excise. The Section 91, which was incorporated in this year’s Finance Bill, provides power to arrest a person for non-payment of collected service tax, by an officer not below the rank of Superintendent of Central Excise.
The Bill, which was passed on May 10, also imposes a penalty on a person or company liable to pay service tax and fails to take registration number from the government.