Indian Oil Corp slapped Rs4.6-cr excise demand

The Directorate General of Central Excise Intelligence has issued a show cause-cum-demand notice to state-run oil marketing firm Indian Oil Corporation over non-payment of Rs4.6 crore in service tax for its functioning as a 'goods transport agency'

''We had issued a notice to IOC last month for tax liability of Rs4.64 crore and the oil major has to reply by May 24,'' according to DGCEI sources.

Indian Oil Corp has not included toll charges paid to its transporters as actual expenses in the taxable value between October 2008 and September 2013, thereby avoiding payment of proper tax as a goods transport agency, a notice issued by additional director-general of DGCEI Samanjasa Das stated.

IOC has been asked to pay the amount of Rs4.64 crore along with interest, penalty and additional penalty as also explain the reasons why it should not be charged for suppressing the value of toll charges paid to the transporters.

The transporters involved move goods of IOC on various routes and some of the roads collect toll charges from these vehicles, Das pointed out.

''Without payment of the impugned toll charges, the goods carriage cannot use the said road and hence, the transporter cannot provide the impugned services of a goods transport agency without paying toll charges,'' the notice pointed out.

Transport of goods to all parts of the country is not possible without incurring the expenditure on toll charges and the provision of service of a goods transport agency is not possible without payment of such toll charges.

The expenditure incurred in the transport thus becomes an intrinsic part of the cost of transportation, DGCEI stated.