IRB Infra slips after service tax notice

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IRB Infra slips after service tax notice
The shares of the IRB Infra structure fell after the service tax notice, which has raised demand aggregating to Rs. 60.46 crores.

The company shares was seen trading lower by 1.44% at Rs 122 on BSE at 12.25 pm IST. It touched intra-day low of Rs 121.

"The demand is on account of service tax payable on toll collected by some of our subsidiaries viz. Ideal Road Builders Pvt. Ltd, IDAA Infrastructure Pvt. Ltd, and ATR Infrastructure Pvt. Ltd., for FY06-07 to FY10-11," the statement said.

The company further said that the department may extend this logic to other SPVs (special purpose vehicles) and may pass similar orders for other SPVs. In such case, the total demand on account of service tax payable, for those subsidiaries of IRB, 111 aggregate, may come to approx. Rs. 230 crore for FY06-07 to FY10-11.

The company said, as  per circular, it clearly states that SPVs who themselves collect Toll, without appointing any independent entity for collection, do so on their own account as Concessionaires and not as Agents and therefore do not attract service tax.

The company said that they believe the demand is incorrect and will file an appeal against these Orders before the competent authority to seek relief.

Read more about: irb, service tax
Story first published: Tuesday, September 11, 2012, 12:28 [IST]
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