Notice of demand

This query is : Resolved

shubham goyal (Querist)
Follow

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

SHUBHAM SHARMA

SHUBHAM SHARMA (Expert)
Follow

07 January 2019 Sir, what is the date of receipt of show cause notice?

Thanks and regards
CA Shubham Sharma
contact-9462302922
email- shubham.vnv@gmail.com

Asha Kanta Sharma online

Asha Kanta Sharma

(Expert)
Follow

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.

Upgrade to CAclubindia Pro. Subscribe Now!