04 January 2019
I have received a notice of service tax demand for the f.y. 2012-13, amount of Rs. 20,00,000, this demand is actual, but I have no amount to paid, I had lots of losses in my business.. ...how can I deal with this situation if I want to settle the case.. Plzz suggest me ..it's urgent
04 August 2024
If you have received a service tax demand notice for the financial year 2012-13 amounting to ₹20,00,000, and you are unable to pay the amount due to significant business losses, you have several options to deal with the situation. Here’s how you can approach it:
### 1. **Immediate Response to the Demand Notice:** - **Acknowledge the Notice**: Ensure that you acknowledge the receipt of the notice and communicate with the tax authorities to inform them about your financial situation. This can help in setting up a record of your intent to address the demand.
### 2. **Review the Demand Notice:** - **Check for Errors**: Review the demand notice for any errors or discrepancies in the calculation of the demand. Ensure that the demand is accurate and that all computations are correct.
### 3. **File a Reply or Appeal:** - **File a Written Reply**: Submit a written reply to the notice explaining your financial situation and inability to pay. Request for a reassessment or a waiver of penalties if applicable. - **File an Appeal**: If you disagree with the demand, you can file an appeal with the relevant authorities. This might include submitting a detailed explanation and supporting documents about your financial status.
### 4. **Request for a Payment Plan:** - **Installment Payments**: You may request the tax authorities to allow you to pay the demand in installments if you are unable to make a lump sum payment. This request should be accompanied by a clear explanation of your financial condition and proposed payment plan. - **Settlement Scheme**: Check if there are any ongoing settlement schemes or amnesty schemes that might be applicable to your case, which can offer reduced penalties or other concessions.
### 5. **Seek Relief Under Insolvency or Bankruptcy:** - **Insolvency Resolution**: If your business is facing severe financial distress, consider seeking relief under the Insolvency and Bankruptcy Code (IBC), if applicable. This can help in restructuring or settling debts through a formal insolvency resolution process. - **Consult a Bankruptcy Attorney**: Consult a legal professional specializing in insolvency and bankruptcy to explore your options and ensure compliance with legal procedures.
### 6. **Consult a Tax Professional:** - **Professional Advice**: Engage with a tax consultant or advisor who can provide specific guidance based on your situation. They can help in negotiating with the tax authorities, preparing necessary documentation, and filing appeals.
### 7. **Prepare for Future Compliance:** - **Maintain Records**: Ensure that you keep detailed records of all financial transactions and communications with the tax authorities to support your case. - **Improve Financial Management**: Work on improving your business’s financial health to avoid similar situations in the future. This may include better accounting practices and financial planning.
### Summary:
To address the service tax demand of ₹20,00,000 for FY 2012-13 when you have no current funds to pay:
1. **Acknowledge and respond** to the notice promptly. 2. **Review and contest** the demand if there are discrepancies. 3. **Request a payment plan** or look for settlement schemes. 4. **Consider insolvency** options if applicable. 5. **Consult a tax professional** for detailed guidance and assistance.
Prompt action and clear communication with the tax authorities are key to resolving the issue and minimizing further complications.
CAclubindia
