Non filing of return
This query is : Open
17 April 2016
[Case] Mr. X has taken Service Tax registration in year 2009. But had neither provided any taxable service nor filed a single return since then (i.e. 2016).
How can Mr. X escape from FINES AND PENALTIES and what procedural compliance are to be followed now ?
Please help !!
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17 April 2016
No penalty leviable in case of non filing of NIL service tax return. Surrender the registration if not required.
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17 April 2016
There is no requirement for the assessee to file ST - 3 Returns if he has no taxable services or his taxable turnover is below the threshold limit of Rs.10 lakhs.
The Department may issue notice for filing of ST -3 Return and on filing may demand Late Fee. CBEC Circular No: 97 / 8 / 2007 dated 23rd August 2007 makes it clear "Persons who are not liable to pay service tax (because of an exemption including turnover based exemption), are not required to file ST3 return."
Hence there is no necessity to file ST-3 Return nor pay any Late Fee / Penalty.
The Department may issue notice for filing of ST -3 Return and on filing may demand Late Fee. CBEC Circular No: 97 / 8 / 2007 dated 23rd August 2007 makes it clear "Persons who are not liable to pay service tax (because of an exemption including turnover based exemption), are not required to file ST3 return."
Hence there is no necessity to file ST-3 Return nor pay any Late Fee / Penalty.
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20 April 2016
Here, I will like to draw your attention towards the mail which I got from department
20 April 2016
Dear sir,
Subject: Non filing of ST-3 returns and non-payment of Service Tax during Financial ear 2014-15 (Apr, 2014 to Sept,2014 and Oct,2014 to March,2015) and 2015-16( Apr to Sept) – reg.
It has been observed while going through ACES system that you have not submitted ST-3 returns for the half year ending 2014-15 (Apr, 2014 to Sept,2014 and Oct,2014 to March,2015) and 2015-2016( Apr to Sept) respectively till date. This shows that you have not paid Service Tax on the taxable services provided by you during this financial year.
You are therefore requested to submit the pending ST-3 returns along with late fees and interest on delayed payment of Service Tax to this office latest by 09.03.2016 positively without fail otherwise necessary action against you shall be initiated as per Finance Act, 1994 and Service Tax Rules, 1994. Further your case shall be referred to Anti-Evasion Branch of this Commissionerate for further necessary action at their end.
Yours sincerely
SUPERINTENDENT
20 April 2016
Reply to the notice as no taxable service provided and no service tax payable. ST 3 return not filed in view of no taxable service provided.
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20 April 2016
File NIL Return and close the same. Non Reporting is causing all these notices. File it now at least
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22 April 2016
Hello sir Chikkerur C R..
Can you please guide me with the same.
How to file these returns as they I didn't got the link to file the same. And also for which years (passed) I've to file ?
24 April 2016
You may reply to the notice from Service Tax Department mentioning the 2007 circular I mentioned. The Department insists that Board Circulars are binding on it - rightly so as has been held many a time by the Apex Court - and no officer will go beyond the Circular.
An ordinary letter stating the facts that no Services exceeding the threshold limit has been rendered and in view of CBEC Circular No: 97/8/2007 no ST-3 Return has been filed nor is it needed. You may also add this paragraph "May I also draw your attention to the decision of the Kolkata Bench of CESTAT (amongst many similar decisions by various benches of CESTAT) in the case of M/S Amrapali Barter Pvt Ltd Vs. CST, Kolkata [2013-TIOL-32-CESTAT-KOL] wherein it was held “If the Service provider is registered with the Service Tax Authorities and has not provided any services during a particular return cycle and was not liable to pay any service tax during that return cycle, he is not required to file the Service Tax Return (even nil return) for that period as per the CBEC Circular No 97/8/07- ST dated 23/8/07. In case the Service Provider files the nil return after considerable delay no penalty under Section 77 of Finance Act, 1994 or fees under rule 7C of the Service Tax Rules imposable on him. Such case is fit for invocation of the proviso to rule 7C and grant waiver of late filing fees.” May I also point out that this decision was published in the In – house Monthly Newsletter of the Central Board of Excise & Customs – Vidhi Varta Vol 1. Sl. No. 4 (January 2013) at page 3.
In the circumstances you are requested to kindly cancel the above referred letter and close the matter."
The CBEC has not appealed against this decision and it was circulated to all officers through their monthly in-house magazine Vidhi Varta. It is another matter that the field formations do not read up all the information sent to them.
An ordinary letter stating the facts that no Services exceeding the threshold limit has been rendered and in view of CBEC Circular No: 97/8/2007 no ST-3 Return has been filed nor is it needed. You may also add this paragraph "May I also draw your attention to the decision of the Kolkata Bench of CESTAT (amongst many similar decisions by various benches of CESTAT) in the case of M/S Amrapali Barter Pvt Ltd Vs. CST, Kolkata [2013-TIOL-32-CESTAT-KOL] wherein it was held “If the Service provider is registered with the Service Tax Authorities and has not provided any services during a particular return cycle and was not liable to pay any service tax during that return cycle, he is not required to file the Service Tax Return (even nil return) for that period as per the CBEC Circular No 97/8/07- ST dated 23/8/07. In case the Service Provider files the nil return after considerable delay no penalty under Section 77 of Finance Act, 1994 or fees under rule 7C of the Service Tax Rules imposable on him. Such case is fit for invocation of the proviso to rule 7C and grant waiver of late filing fees.” May I also point out that this decision was published in the In – house Monthly Newsletter of the Central Board of Excise & Customs – Vidhi Varta Vol 1. Sl. No. 4 (January 2013) at page 3.
In the circumstances you are requested to kindly cancel the above referred letter and close the matter."
The CBEC has not appealed against this decision and it was circulated to all officers through their monthly in-house magazine Vidhi Varta. It is another matter that the field formations do not read up all the information sent to them.
25 April 2016
Thank you very much sir :)
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