Maximum Penalty for late filing of Service Tax Return

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CA Sanjay Baheti (Querist)
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21 May 2011 If a Assessee files half yearly service Tax Return for half year ended on 300910 in May 2011. What would be the maximum penalty amount. is it Rs. 2000- as per earlier years act or Rs. 20000- as per new finance act applicable for FY 2011-12. What would be the penalty amount for late deposit of service tax if tax is paid in May 2011.is this penalty will be in addition to the penalty being paid for late filing of return.

CA Ankit Gulgulia (Jain)

CA Ankit Gulgulia (Jain) (Expert)
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21 May 2011 Penalty as Rule 7C is Maximum of Rs 2,000/-. Penalty for late Payment will be as follows (As per S.76)

Higher of
1) Rs 200 Per Day
2) 2% p.m of Tax Liability

Subject to Total Amount of Tax.

This Penalty will be in Addition to penalty for late filing , Since Section 76 and 78 are mutually Exclusive and Rule 7C is completely in addition to these Sections.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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21 May 2011 Ankit Ji

The maximum penalty was proposed to Rs. 20,000/- in the Finance Bill,2011. Kly inform the present position of that proposal.

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Pragnesh

Pragnesh (Expert)
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21 May 2011 Dear Friend As per revevant extracts of letter D.O.F.No.334/3/2011-TRU Dated : 28/02/2011 point no. 4.4 "4.4. The maximum penalty for delay in filing of return under section 70 is proposed to be increased from Rs. 2,000/- to Rs.20,000/-. However, the existing rate of penalty is being retained under rule 7C of the Service Tax Rules, 1994. The maximum penalty is presently reached after a delay of 40 days. The new limit will impact only those who delay filing of return for longer durations". The revised penalty will be applicable w.e.f. 01.04.2011
hence 20000/- would be applicable.