can now be arrested with imprisonment for up to seven years in addition to the penalty which may extend to Rs 1 lakh.
The action taken by the department is in line with government policy, whereby government had announced VCES Scheme to pay all dues, but in spite of the said scheme, the tax payers are not coming clean.
The scheme was aimed at encouraging disclosure of tax dues by persons who have not paid up between October 2007 and December 2012.
They were required to pay at least 50 per cent of their dues by December 2013 and the rest by June 2014 without interest and penalty.
The service tax amnesty scheme has yielded around Rs 7,700 crore to the exchequer.
Finance Minister P Chidambaram had met industry bodies to encourage assessees to take advantage of the tax amnesty scheme to avoid punishment.
According to government estimates, out of 17 lakh registered service tax payers, only 7 lakh are paying the levy.