The country?s leading government housing developer, the Delhi Development Authority (DDA), is in a soup over a nearly Rs 758-crore tax bill slapped on it for allegedly not paying service tax for three years since 2007-08 on the services provided by the body.
The service tax wing of Central Board of Excise and Customs (CBEC) has issued a demand-cum-show cause notice to DDA asking it why it has failed to pay over Rs 757 crore tax on two services?renting of immovable property and club or association service ?sources told FE.
The department has sought a reply within 30 days after which penal action could be taken against the agency. According to the tax department, the DDA had not paid tax on the two specified services for 2007-08, 2008-09 and 2009-10. When contacted, a DDA spokesperson denied any knowledge of the development.
The CBEC notice, a copy of which is with FE, said: ?it also appears that the assessee had deliberately avoided the payment of service tax, violating various provisions of the Service Tax Act. They were working under self-assessment and the onus to pay proper services tax was on them. The assessee appears to have suppressed the facts and delayed submission of documents/information.?
DDA receives income from sale of developed land, sale of undeveloped land and ground rent. It also receives income from membership fee and other fees from sports complex and club services. These services are taxable at the rate of 12%.
The service tax liability from renting of immovable property is Rs 749.3 crore and from club or association service is Rs 8.54 crore.
The notice also warns of penal action if it does not furnish the documents and fails to respond to the notice within the specified time limit.