Tuesday, 11 September 2012
IRB Infra plans to challenge the order from Service Tax authorities that has raised a demand of Rs 60.46 crore
IRB Infrastructure Developers plans to challenge service tax order of Rs 60.46 crore penalty.IRB said that the Commissioner of Service Tax has imposed the penalty on IRB's SPV citing that these were toll collecting agents of National Highways Authority of India and were liable to pay service tax, while the company argues that as the SPVs are "concessionaires" which are executing the projects on build-operate-transfer basis and are not liable to pay service tax.
If the Service Tax department extends this logic to IRB's other special purpose vehicles then the potential tax liability could be as high as Rs 230 crore, the Mumbai-headquartered infrastructure developer said.
"We will challenge this order in the tribunal since we believe that that the interpretation of law is not correct," Virendra Mhaiskar, promoter and chairman of IRB told ET.
"Each of our SPV is a build-operate-transfer concessionaire and are not liable to pay the service tax," Mhaiskar said. Reacting to the news, shares of IRB ended at Rs 122.80 on the Bombay Stock Exchange on Tuesday, down 1.5%.
If the Service Tax department extends this logic to IRB's other special purpose vehicles then the potential tax liability could be as high as Rs 230 crore, the Mumbai-headquartered infrastructure developer said.
"We will challenge this order in the tribunal since we believe that that the interpretation of law is not correct," Virendra Mhaiskar, promoter and chairman of IRB told ET.
"Each of our SPV is a build-operate-transfer concessionaire and are not liable to pay the service tax," Mhaiskar said. Reacting to the news, shares of IRB ended at Rs 122.80 on the Bombay Stock Exchange on Tuesday, down 1.5%.
