Late service tax return filling

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

16 August 2016 Whether the Late fees paid for Late filling of service tax return is allowable as a expenditure as per income tax act 1961.

Please reply,

CA.Shubhneet Kaur

CA.Shubhneet Kaur (Expert)
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16 August 2016 Any kind of penalty paid is disallowed as per Income Tax Act,1961.

Querist : Anonymous

Querist : Anonymous (Querist)

16 August 2016 Thanks for the reply Sir,

but my question is about the Late Filling Fees of service tax

for the reference I find one link, i.e. https://www.caclubindia.com/articles/late-fee-and-penalty-for-delayed-filing-of-st-3-returns-10787.asp

Kindly express your view, waiting for your prompt reply.

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CA.Shubhneet Kaur

CA.Shubhneet Kaur (Expert)
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16 August 2016 Dear please note that all kind of interest paid on late payment or late fee paid or payable is in consequence of default in discharging a statutory liability and cannot be considered as an expense wholly and exclusively for the purpose of business or profession and hence it cannot be allowed as an expenditure u/s 37(1) of Income Tax Act, 1961.

I hope it satisfies your query.

Querist : Anonymous

Querist : Anonymous (Querist)

16 August 2016 Dear Sir,

As you told me that any interest paid on late payment is not allowed as a business expenditure but as per the given case law the interest paid is allowed as a business expenditure,

AIT-2010-26-ITAT
Ginners & Pressers Ltd. Vs. ITO, Mumbai
Interest on delayed payment of service tax is levied u/s 75 of the Service Tax Act and penalty for failure to pay service tax is governed u/s 76 of that Act. A plain reading of both the sections 75 and 76 clearly demonstrate that as far as interest is concerned, it is purely compensatory in nature and hence should be allowed as such. The interest in this case is not levied for violating any statute. Thus we uphold the findings of the first appellate authority and dismiss this ground of the Revenue.

So the like wise late fees paid for the late return filling is also allowable & not the penalty for the late return filling. ( In my opinion ).

Ruchi

Ruchi (Expert)
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16 August 2016 @Anonymous
You are right. The late fees is allowable expense and any penalty paid is disallowable.

Querist : Anonymous

Querist : Anonymous (Querist)

16 August 2016 DO YOU HAVE ANY SUPPORTING / ANY CASE LAW / ANY SOURCE TO PROVE THAT OUR STATEMENT IS RIGHT.

Ruchi

Ruchi (Expert)
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16 August 2016 You have quoted the same yourself above...... Ginners and Pressers ltd.

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Querist : Anonymous

Querist : Anonymous (Querist)