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Sep 11, 2012, 03.18 PM IST
IRB Infra has received a service tax demand notice from the IT department on September 10 and VD Mhaiskar, CMD of IRB said they are looking at a one time penalty of around Rs 300 crore applied on three of its operational special purpose vehicles (SPVs).
Here is the edited transcript of the interview on CNBC-TV18. Q: Can you tell us about this demand notice that you have received and what would be the financial impact if in case this does come through and the company loses the appeal? A: The service tax demand that has come is for three of the 10 SPVs which are operational. What they have done is they have calculated a service tax on the gross toll amount collected by SPV and tax it at the prevailing service tax breaks. If we have to look at the total order believing that it would apply for all the ten SPVs, then it would come close to Rs 300 crore. Q: Including the penalties as well? A: No, it would be one time penalty and interest would be extra. Q: What is the composite amount you are looking at before we come to the tenability of that amount? A: Rs 300 crore would be the demand. Rs 300 crore can be the one time penalty and the interest would have to be calculated on the individual year. Q: What is the sense you are getting in terms of how long it takes to resolve? You have indicated that you are contesting the demand? A: Within 90 days we have to apply for the appeal and after that along with the appeal we will have to file for the stay as well and we do not see a major challenge in that. Q: Do you see this impact other BOT projects as well? A: No, that is what I am saying that if we have to apply the same logic to all the ten operational projects, that is the demand I had stated earlier.
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