04 April 2012
If a service provider provides two types of services and he delays payment of service tax by 4 days then what would be penalty of Rs.100 per day u/s.76? Is it 4days X Rs.100 X 2 services = Rs.800/- or 4days X Rs.100 = Rs.400/-? If its Rs.400/- then what would be accounting code for the penalty as there are different codes for penalties for different services.
05 April 2012
For the delay in payment of service tax, the assessee is required to compute interest @18% per annum on the number of days and remit the same along with the tax amount due. The levy of penalty under section 76 is @ Rs.200/- per day of delay or 2% per month, whichever is higher, however thye total penalty shall not exceed the amount ofservice tax payable. Levy of penalty cannot be made without giving an opportunity to the assessee to be heard. Hence, if no Show Cause Notice is received from the Department no penalty will be levied. The Show Cause Notice has to be issued within one year from the date of payment or from the end of the year in which the tax is payable, whichever is later.
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