Condone penalty

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Aditya (Querist)
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19 February 2016 Sir, Is there any way to condone the penalty for non filing of Service Tax Returns?? If the assessee wishes to pay the penalty upto the date of challan payment then can he do so & give a written application to the department ??

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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20 February 2016 There is no provision in Finance Act 1994 (as amended) by which fees for late deposit of ST - 3 Returns can be reduced or waived. The Late Fee is levied for late filing of ST - 3 Return and has no link whatsoever to the payment of duty. Further while interest is chargeable on unpaid service tax, the maximum late fee that can be levied is Rs.20,000/- per return even if it filed say after three years. In the current scenario the interest for late deposit of duty by three years would involve an interest element of 81% [(18% p.a. * 6 months)+(24% p.a. * 6 months)+(30% p.a. for 2 years)].

There is no way the delay can be condoned and lesser late fee paid.