The MD of a city-based management consultancy firm has been arrested for failing to deposit service tax collected from his clients to the government.
The arrest was made on July 5, a senior Service Tax Department official said, requesting anonymity.
He was produced before a local court, which sent him to judicial custody, the official said.
According to rules, if someone collects service tax and doesn't deposit it to the government beyond a period of six months, it becomes a cognisable offence and the person can be arrested if such amount is more than Rs 2 crore, the official said.
"During investigation, it came to light that the firm had collected service tax of around Rs 18 crore from his clients but deposited merely Rs 41 lakh to the department.
"So far, the department has recovered Rs 3 crore from various bank accounts of the accused and his clients," the official added.
