New Delhi : Online travel company MakeMyTrip is under probe for alleged service tax evasion of Rs 75 crore.
The Directorate General of Central Excise Intelligence (DGCEI) has registered a case against the online travel services provider for allegedly not depositing service tax which it had collected from the customers, official sources said.
Following the probe, one of the company’s senior executives was arrested by the DGCEI officials and released on bail last week, they said. When reached for comments, a company spokesperson said the service tax case is an industry issue and it will be contesting the case with appropriate authorities. “The service tax case in question is potentially an industry issue that can impact all Online Travel Agents (OTAs). “We have a strong case as advised by our tax advisors and therefore will be contesting the matter with the appropriate authorities. We are extending our full cooperation to the authorities in the investigation. Service tax is charged at the rate of 14.5 % (including 0.5 % of Swachh Bharat Cess).
The DGCEI investigation has found that the company was collecting two types of taxes–service tax on 60 % of the rate negotiated by MakeMyTrip with the hotels towards renting of rooms and service tax on 10% of the gross value on the customer vouchers by treating themselves as tour operators. The second category of service tax was being mentioned as MMT (Make My Trip) Tax by the firm, sources said. It is also found by the DGCEI that MakeMyTrip was depositing so called MMT Tax and not the one collected from the customers towards renting of hotel rooms, they said.
