The Commission for the Investigation of Abuse of Authority has arrested Inland Revenue Department  (IRD) Director General Chudamani Sharma on Friday.

According to the CIAA sources, Sharma was apprehended from his office on the charge of corruption and tax embezzlement at 12:30 pm.

Interrogation is going on by keeping him at the CIAA custody, it has been learnt.

According to CIAA sources, Sharma has been arrested in the case associated with tax exemption worth billions of rupees.

The latest report of the Office of the Auditor General (OAG) has revealed that the commission exempted taxes worth Rs 21 billion, which was 68 percent of the total due or outstanding tax amount determined by the commission.

Sharma was the member of Tax Settlement Commission formed in 2015 by the Finance Ministry.

The then Finance Minister Ram Sharan Mahat had formed a three-member commission under LD Mahat, a chartered accountant.

He was arrested on the basis of complaints filed in the CIAA where he has been accused of corruption in the name of tax exemption.

According to OAG report, the commission had assessed taxes that were due or outstanding till the fiscal year 2012-13. The commission had received 1,726 applications seeking settlement of due tax amount worth Rs40.8 billion. It had reviewed 1,069 applications from which due tax amount of Rs30.5 billion should have been recovered. But during the course of negotiations, the commission exempted taxes worth Rs21 billion and recovered only Rs9.5 billion in due tax amount.

Following OAG report, the Parliamentary Public Account Committee had directed the Ministry of Finance to submit a report prepared by the Tax Settlement Commission within 14 days, suspecting negligence in tax exemption provided to various enterprises, which could have prevented entry of billions of rupees into the state coffers.

“This is just a beginning,” a CIAA official said on condition of anonymity, adding, “More persons could be arrested on the same issue.”