BGR Energy has come under the scanner for tax evasion. The directorate general of Central Excise Intelligence has booked a case of tax evasion against the company.
We disagree to the contention of the service tax department, said PR Easwar Kumar, chief financial officer of the company. Kumar clarified that the company will not have any liability at the end of the proceedings. Here is the edited transcript of his interview. Also watch the accompanying video. Q: What is your reaction to the company's statement in terms of the allegations being put by the tax authorities?
A: This allegation has come from service tax department of central excise. A show cause notice has been served on us demanding tax payment for looking at the entire contract as a single one.
We are in the business of executing balance of plant (BOP) contracts and engineering, procurement and construction (EPC) contracts, where we get separate orders for supply, installation and civil. The service tax authorities have combined these contracts together, treating it as a single contract and charged service tax.
This show cause notice has been received full. There are many annexure which are yet to be given by the department. This is a show cause notice, where we have only 30 days time to reply. Only when our reply is adjudicated, the demand will get materialised. As of today, this is a mere show cause notice which has not been served in full. Q: Do you disagree with the contention of the service tax department? Do you think that there will not be enough cause for you to pay up the amount which the tax department has demanded?
A: Yes, absolutely. These are all individual contracts and we will not have any liability at the end of the proceedings. We have already paid the due service tax for the erection and installation commissioning.
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