Ernst and Young and its associates booked for Service Tax evasion

M/s Ernst and Young (P) Ltd, one of the world's leading consultancy firms, and its associate entities - M/s Ernst and Young, M/s S.R. Batliboi and Co., S.R. Batliboi and Associates, have been issued Show Cause Notices for the Service Tax evasion of Rs. 7.29 crores, Rs. 9.28 lakhs, Rs. 43.5 lakhs and Rs. 34 lakhs respectively by the Service Tax Commissionerate, New Delhi.

On the basis of information collected by the Commissionerate, investigations were initiated against M/s Ernst and Young to enquire into Service Tax evasion. After investigations M/s Ernst and  Young and its associate entities were found to be liable to pay service tax as recipient of services from outside India under Rule 2(1)(d)(iv) of Service Tax Rules, 1994; Section 65(105) explanation and Section 66A of the Finance Act, 1994. M/s Ernst and Young have already paid Rs. 2.20 crores approximately towards their Service Tax liability.