It was only when it was brought to their notice a couple of months ago by the Directorate General of Central Excise Intelligence (DGCEI), Bangalore zonal unit that they woke up to the reality and hurriedly paid up the service tax.
The DGCEI, Bangalore recently unearthed that leading public sector oil companies — Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Limited (HPCL) and some branches of the State Bank of India in Bangalore and across the country had reportedly not paid their service tax  with regard to Employee Provident Fund.
Following the crackdown in Bangalore, the DGCEI, Bangalore began verifying tax irregularities in other branches of the SBI all over the country.
“According to the preliminary reports tax evasion may cross Rs 10 crore. We recovered Rs 60 lakh from some branches of the bank in the City. The bank is supposed to pay the service tax with regard to the EPF under the banking and financial services. They said they were not aware of it,” said an official source.
 In the case of oil majors, the tax evasion was detected when the Directorate came to know that the LPG dealers, who promote products of some manufacturers like gas stove, rubber tube etc had not paid their service tax.
“They are promoting certain products and are liable to pay service tax under the business auxiliary services. When we pointed it out to them, they said they were not aware of it,” said an official source at the DGCEI, Bangalore.
Demand notice
“Based on our information, the Commissioner Service Tax, Mumbai, who is the adjudicating authority in the case of the oil companies, recently issued a demand notice to the IOCL and BPCL. They are yet to issue a notice to the HPCL. The tax evasion by the IOCL was Rs 1.5 crore and BPCL, Rs 2.25 crore. Despite the fact that they have paid the taxes, they will have to go through the adjudication process,” said the officer.
While non compliance of taxes is a poor reflection on a firm, awareness of service tax is still to catch up in the country, especially in the context of its technical interpretation.
As per the Finance Act of 1994, all service providers in India, except those in Jammu and Kashmir, are required to pay service tax under various categories. Service Tax, which came into effect on July 1, 1994, is regulated and administered by the Central Excise Commissionerates under the Department of Revenue, Ministry of Finance, Central Board of Excise and Customs, and the Government of India. The government depends on the voluntary compliance of the service providers for collecting service tax in India.
Initially when the service tax was introduced only three services were under the purview of the tax. Since then, in several phases and installments, the government brought nearly 100 categories under its ambit. Service Tax is one of the highest revenue generators in India.