Fraud
According to officials, Leonia management deliberately avoided paying GST worth Rs 13.8 crore despite notices served by the tax department.
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Chairman and Managing Director of Leonia resorts, GS Chakravati Raju was arrested on Wednesday for tax evasion to the tune of Rs 13.8 crore worth of GST. The arrest was made by the Director General of GST Intelligence after Raju allegedly did not cooperate with the investigation despite being served several notices.

He has been sent to judicial custody. Authorities also attached five bank accounts of Leonia for tax evasion.

According to reports, the resorts have been collecting GST from the customers but not remitting it to the government since July 2017 when the GST came into implementation, and were diverting the same towards private purposes.  

Authorities also claimed that the Leonia management deliberately avoided paying GST despite being regularly served notices by the service tax department.

Deccan Chronicle quoted the DGGI as saying “The GST law stipulates that all the amounts representing GST collected from service recipients have to be mandatorily credited into the government account and that periodical returns be filed by a specific date, every month. However, the management of Leonia chose not to pay the tax and have not filed any returns, with a deliberate intention to evade GST. The management of the resort has a dubious history of not paying applicable service tax in the past too and several notices were issued to them by the Service Tax Department.”

DGGI authorities claimed that during the investigation, Raju admitted that Leo Meridian Infrastructure Projects & Hotels Ltd, which owns Leonia Resorts, has not been paying GST after collecting it from customers.

According to the GST law, if any service provider collects GST and fails to remit the same to the government beyond a period of three months and if the amount involved is more than Rs 5 crore, it would be considered the gravest form of GST offence and a cognisable and non-bailable offence.

Any person committing such an offence would be imprisoned for a term which might extend up to five years and a fine.

It may be recalled that Raju was earlier arrested in January last year by the CBI in a bank fraud case involving Rs 54 crore, for defaulting on payment of loans.