Suspecting tax evasion, the Enforcement Wing of the Commercial Taxes
Department on Thursday conducted searches on 40-odd premises of
Hotel Saravana Bhavan across Chennai and suburbs on Thursday.
File photo
BL :VS PALANIAPPAN :20 JUNE 2014
The searches began at 7 a.m. by a team of more than 100 personnel
Suspecting tax evasion, the Enforcement Wing of the Commercial Taxes Department on Thursday conducted searches on 40-odd premises of Hotel Saravana Bhavan across the city and suburbs.
The searches began at 7 a.m. by a team of more than 100 personnel. “Searches were conducted on suspicion that there could be evasion of sales [Value Added Tax], undermining the sales,” said a senior official of the Commercial Taxes Department.
Data collected
Data and records were being collected to be compared with the declarations made by the company in the past, and the declaration pertaining to the current taxation period. Only then could an opinion be formed whether or not there was tax evasion, officials said.
The food chain is very popular in the city. It has a number of branches in the country and abroad.
The premises that were searched included 29 branches, stores, kitchens and service centres. The operation was expected to continue on Friday to cover all branches, the official said.
Combo pack
Speaking on behalf of the company, K. Kamalakannan, creative in-charge, told The Hindu that the food chain recently introduced a combo pack for breakfast, lunch and dinner. The pack had assorted items at a reasonable price, offering many of the items on the menu in smaller quantities. This proved a hit, and the sales went up. Perhaps, the officials were trying to ascertain whether the firm had declared the actual sale volume for VAT remittance, he said.
Asserting that there was no suppression of facts or tax evasion, he said the company was co-operating with officials so that the search could be completed at the earliest.
CHENNAI: The sales tax authorities raided the offices and restaurants of Hotel Saravana Bhavan on Thursday on suspicion of tax evasion.
A source from the Sales Tax department, who confirmed the raids, on condition of anonymity, said, "We suspect omissions in sales declaration. We are checking the entire day's sales transactions. We are comparing it with the last declaration made by the hotel."
"Officials began the raid in big outlets of the chain in Chennai and Kancheepuram early today. We will monitor the sales in all these outlets till they down shutters late in the night.
"We will check the sales in each of the outlets today and then compare it with the previous declaration of sales given by Saravana Bhavan. If the difference is more than 10 per cent, we will flag it for appropriate action," the official said.
Hotel Saravana Bhavan, which on an average attracts 80,000 customers daily across its over-35 outlets in India, cut down food prices in October 2013 due to fall in footfalls. Rivals like Adyar Ananda Bhavan followed suit. On an average, these restaurants slashed prices by 10-20 per cent.
A source at Saravana Bhavan said: "The footfalls increased post price cut which is a common phenomenon everywhere. When price falls demand does up. Anyways our books are clean and we have nothing to hide," he added.
Hotel Saravana Bhavan, which started with a small food outlet in a middle-class neighbourhood in Chennai in 1981, now has more restaurants overseas than in India. The chain now has 35 branches in India and 54 overseas, in places such as the US, Canada, Singapore, West Asia and the UK.
A source from the Sales Tax department, who confirmed the raids, on condition of anonymity, said, "We suspect omissions in sales declaration. We are checking the entire day's sales transactions. We are comparing it with the last declaration made by the hotel."
"Officials began the raid in big outlets of the chain in Chennai and Kancheepuram early today. We will monitor the sales in all these outlets till they down shutters late in the night.
"We will check the sales in each of the outlets today and then compare it with the previous declaration of sales given by Saravana Bhavan. If the difference is more than 10 per cent, we will flag it for appropriate action," the official said.
Hotel Saravana Bhavan, which on an average attracts 80,000 customers daily across its over-35 outlets in India, cut down food prices in October 2013 due to fall in footfalls. Rivals like Adyar Ananda Bhavan followed suit. On an average, these restaurants slashed prices by 10-20 per cent.
A source at Saravana Bhavan said: "The footfalls increased post price cut which is a common phenomenon everywhere. When price falls demand does up. Anyways our books are clean and we have nothing to hide," he added.
Hotel Saravana Bhavan, which started with a small food outlet in a middle-class neighbourhood in Chennai in 1981, now has more restaurants overseas than in India. The chain now has 35 branches in India and 54 overseas, in places such as the US, Canada, Singapore, West Asia and the UK.
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