MakeMyTrip is under probe for alleged service tax evasion

By | January 19, 2016

  MakeMyTrip is under probe for alleged service tax evasion

 The Directorate General of Central Excise Intelligence (DGCEI) has registered a case against the online travel services provider ‘MakeMyTrip’for allegedly not depositing service tax collected from the customers.

The investigation revealed that the company was collecting two types of taxes, viz, service tax and Make My Trip Tax (‘MMT tax’). It was collecting service tax in two forms, viz, on 60% of the rate negotiated by it with the hotels towards renting of rooms and on 10% of the gross value on the customer vouchers by treating themselves as tour operators.

It was found that ‘MakeMyTrip’ was depositing so called MMT Tax and not the one collected from the customers towards renting of hotel rooms. ‘MakeMyTrip’ has collected Service Tax to the tune of Rs 83 crore (approximately) from October 2010 to September 2015 from customers for taxable service of renting of hotel rooms out of which Rs 67 crore has not been deposited in the government account.

The estimated alleged evasion of service tax by ‘MakeMyTrip’ is about Rs 75 crore. Make My Trip has so far deposited Rs 15 crore towards its anticipated service tax liability. Following the probe, one of the company’s senior executives was arrested by the DGCEI officials and released on bail last week.

Meanwhile, the DGCEI has conducted a detailed background check of some of the 30,000 hotels which have agreements with ‘MakeMyTrip’. So far the verification conducted in respect of 490 hotels has found that 212 of them are not even registered with the service tax authorities.

Source – Hindustantimes.com

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