25 August 2010
We are a public limited company and rented our tool room with plant and machinery w.e.f. 01/07/2009 on quarterly user charges of Rs.30 Lacs per quarter. Till date we have received Rs.1.2 Crores as user charges for the four quarters from 01/07/2009 to 30/06/2010. But when we raised the bills for the user charges we not charged any Service Tax and also not deposited as, we thought that the service tax is not chargeable on the user charges. But now we came to know that user charges are considered as rent and service tax is chargeable. Till date we are not registered under the Service Tax.
Now we want to charge the service tax on the user charges that we have already received for the period from 01/07/2009 to 30/06/2010. But on the date of bills for the user charges we were not registered under the service tax and accounts for the F.Y. 2009-10 have been audited and finalized and we not charged the service tax.
Now my questions are
1. Now if we get the service tax registration can we charge the service tax on the user charges that we have already received for the period from 01/07/2009 to 30/06/2010.
2. On which date we can raise the bills for the service tax.
3. If now we deposit the service tax how much penalty we have pay.
4. We also need to pay the service tax on the various services (input services) obtained by us. So the service tax liability that will arise on the receipt of arrears can be set off against amount of service tax that we have paid to the input service providers for obtaining their services (input services).
26 August 2010
Pl examine whether there is any liability in the first place. It may not be rental of IP in my opinion. However contracts bills , actual transaction is tobe understood.
There is no bar in making the payment of ST later after registration. Raise a supplementary bill referring to the earlier bills raised mentioning the ST was not charged.
You may require only to deposit the ST and interest. penalty is not applicable for sou moto bona fide payments.
The amount deposited couldbe net of the eligible credits on capital goods, inputs and input services. See Rule 6 of the Cenvat Credit rules.
26 August 2010
1. At what rate the interest is payable for the delay in deposition the service tax.
2. If otherwise eligible whether the credit of service tax on inputs can be set off against the amount of service tax that we will now receive on the user charges received by us during the period from 1-7-2009 to 30-06-2010.
26 August 2010
The rate of interest presently applicable in 13% p.a. based on the number of days of default.
Shri Madhukar is right that no penalty is payable in case suo-motu payment of tax and interest amount is made before the issue of Show Cause Notice by the department.
Yes you may be able to claim set-off of service tax / excise duty paid on input services / inputs provided the same is claimed in service tax return.
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