BGR Energy gets show-cause for Rs107-cr tax evasion

The Directorate General of Central Excise Intelligence has registered a case of evasion of service tax to the tune of Rs107 crore over the past five years against Chennai-based BGR Energy Systems India Ltd, a leading engineering, procurement and construction company that executes large turnkey projects for the power sector.

The DGCEI said in an official release on Friday that BGR Energy Systems had obtained contracts worth Rs20,000 crore to carry out projects in thermal power plants. Upon investigation, it was found that the company had apparently suppressed full value of contracts and services to state and private power generating entities.

''An investigation was done covering 12 mega thermal projects of BGR Energy including those in Mettur and Valuthur in Tamil Nadu besides others in states including Andhra Pradesh, Maharashtra and Chattisgargh,'' the DGCEI said. "It has been alleged during investigation that BGR Energy Systems has suppressed the full value of the works contract services rendered by them.''

Following the probe, it was found that BGR was deliberately suppressing taxable value with an intention to evade ST, it added. ''A show cause notice has been issued. It is estimated that the short payment of service tax is about Rs107 crore.''

BGR Energy Systems has been accused of "deliberate suppression of taxable value with an intention to evade service tax."

Company officials declined to comment on the issue.