May ask Mumbai court to issue non-bailable warrant or summons
Rahul Tripathi & Dipanjan Roy Chaudhury
New Delhi: The Enforcement Directorate is divided over its next steps and is weighing its options after Vijay Mallya ignored three summons to appear before the agency, and is preparing a foolproof case for seeking revocation of his diplomatic passport.
ED, which wants to question Mallya in connection with loans given to Kingfisher Airlines, is contemplating asking the Mumbai court to issue a non-bailable warrant against him or issue summons to ensure his presence in court. The agency has sought legal opinion on the matter and may approach the Mumbai court in the next couple of days, a government official told ET. The development comes a day after ED wrote to the ministry of external affairs to revoke Mallya’s diplomatic passport. This time the agency is being careful because it wants to avoid a repeat of the Lalit Modi case, when a court overturned MEA’s revocation of the former Indian Premier League commissioner’s passport.
Mallya, who is wanted for questioning in connection with .₹ 900 crore of loans taken from a consortium of banks led by IDBI Bank, left for the UK on March 2.
The telecom firms had said this amounted to retrospective taxation as it was also applicable on deferred payments of spectrum purchased before April 1.
“Service tax is payable on such payments… However, the same have been specifically exempted,” the CBEC communication said. This will ensure there is no new tax liability on telecom service providers in respect of services provided in the past. “This addresses concerns of telecom providers,” a government official told ET.
Telcos have the option of making full payment upfront or in instalments for airwaves acquired at auctions. There was lack of clarity regarding when the liability to pay service tax would arise where the company chooses to pay in instalments under the deferred payment option over a period of 10 years. There was concern the move on service tax would jeopardise spectrum buyers’ finances since this liability had not been taken into account prior to bidding.
“The exemption to assignment of right to use spectrum for spectrum assigned to the telecom companies prior to April 1will prevent any retrospective taxation,” said Bipin Sapra, partner, EY. Sapra said the government had prevented effective loss of credit to the telecom companies by allowing the cre- dit of service tax on such spectrum charges to be deferred to only three years as against the total period of assignment as proposed in the Finance Act. But the industry wants the period further cut to two years.
“We are very grateful to the finance minister for addressing our concerns and for permitting us to take the offset in the third year rather than the end of 20 years,” said Rajan Mathews, director-general of Cellular Operators Association of India (COAI). “However, we would further request the government to bring it down to two years in conformity with the offset granted to capital assets. Secondly, we have also requested for clarification on whether the interest component of the deferred payment will also attract the service tax, when one finances through the department of telecom.” The CBEC has also issued a list of exempted government services to provide clarity on the imposition of tax at15%, including two cesses. Right of way, licence fees and development rights will attract service tax. The Finance Act 2015 made an enabling provision to exclude all services provided by the government or local authorities to a business entity from the negative list. These services will now become taxable. The provision, however, does not cover government services provided to individuals.