Sec 77 penalty

This query is : Resolved

JIMMY VADERA (Querist)
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05 September 2011 One of Client, has been failed to get GTA Registration in FY 2006-07, not intentionally but due to ignorance. Now during July 2011, there is Audit by Department and in which they have found. Department issued notice to
1.Get Service Tax Registration
2.Pay Interest (Rs.5000 for 4 years)
3.Pay Service Tax (Rs.16000 for 4 years)
4.File Service Tax Return from 06-07 with Penalty

Now, How much maximum penalty U/s 77 can be levied? Provision says Rs.200 per day till compliance, is that is case,Client has to pay Rs.4,00,000 just as penalty? What remedy is avaliable? Is this can be waived? Please help.

U S Sharma

U S Sharma (Expert)
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10 September 2011 visit the audit team and convince then in the following manner

1) registration taken today will be valid from this half year, so you are ready to discharge the service tax lialility and file return from current period.

2) as related to previous periods, you are ready to pay the challan, but as it is related to previous periods, the registration is not effective for previous periods,

3) produce the paid challan copy to Audit and ask them to drop the return submission clause. as the revenue is paid with interest.