Ram kr. (Buisness) (883 Points)
28 April 2009Dear Friends,
This half yeary service tax return last date on 25th April (Saturday). Thats why i have deposited service tax return on 27th April Monday as per service tax rule but our Service tax inspector denied to accept service tax return. He said you can deposit service tax return alongwith Rs500/- late fee. Is any Trade notice published by Service tax department in this regard. Pl. tell.
Thanks
k n v v s k sri kanth
( )
(564 Points)
Replied 29 April 2009
The service tax law recently introduced a provision whereby a late payment fee has been prescribed for delayed filing of returns. The fee for delayed filing of a return up to 30 days from the prescribed date of filing return—for the half year ending September 30, the return is to be filed by October 25—is Rs 1,000 and beyond such period is Rs 100 per day subject to a maximum levy of Rs 2,000. The delay in filing the half-yearly returns in your case is beyond 60 days. Hence, you would be liable to pay the maximum penalty of Rs 2,000
The Finance Act, 1994 provided for the imposition of penalties in the following cases when the assessee: It is interesting to note that originally, provisions had been made in the law for prosecution for violations of requirements of Service Tax. The same, however, have been deleted by the Government by the Finance Act, 1998, as a measure of goodwill to the new assessees. In terms of Section 75 of the Finance Act, 1994, every person, liable to pay the tax in accordance with the provisionsof Section 68 of the Finance Act, 1994, or rules made thereunder, who fails to credit the tax or any part thereof to the account of the Central Government within the period prescribed shall pay simple interest at the rate of fifteen per cent per annum (proposed to be amended by the Finance act 2004 to read ''at such rate not below 10 percent and not exceeding 36% per annum'') for the period by which such crediting of the tax or any part thereof is delayed. This penalty is to be computed on the service tax due or unpaid. Section 76 of the Finance Act, 1994 provides that any person, liable to pay Service Tax in accordance with theprovisions of Section 68 of the Finance Act, 1994 or the rule made thereunder, who fails to pay such tax shall pay in addition to paying such tax, and interest on that tax in accordance with the provisions of Section 75 of the FinanceAct, 1994, a penalty which shall not be less than one hundred rupees but which may extend to two hundred rupees for every day during which such failure continues, so, however, that the penalty under this clause shall not exceed the amount of Service Tax that he failed to pay. Penalties under this Section shall be over and above the payments of actual amount of tax due under Section 68 of the Finance Act, 1994 and interest under Section 75 of the FinanceAct, 1994.The penalty under Section 76 is of mandatory nature and can not exceed the amount of Service tax in question. Section 78 of the Finance Act, 1994 provides for levy of penalty for two specific default or offences, with the intent to evade the payment of Service tax: i.e. The Finance Bill 2004 has substantially enlarged the scope of Section 78 of the Finance Act, 1994 by clearly elucidating the evasion on grounds of : The penalty under this section shall be a minimum of the amount of Service Tax sought to be evaded and a maximum of twice the amount of Service Tax. This penalty shall be in addition to the tax and interest payable. Thus,the penalty is a sum which shall not be less than, but which shall not exceed twice the amount of Service Taxsought to be evaded. Section 79 provides for imposing a penalty for failure to comply with the notice issued to assessee under Section 71. It is the duty of the assessee to produce any accounts, documents or other documents, etc., as the Superintendent of Central Excise may call for the purpose of verification of the Service Tax return filed by the assessee. The jurisdiction to initiate the penalty under Section 79 vests with the Assistant or Deputy Commissioner of Central Excise. Thus, for failure to comply with the provisions of Section 71 in respect of self-assessment and verification of tax assessed by the assessee, the penalty leviable is – This provision is sought to be deleted by the Finance Bill 2004. In terms of Section 80 of the Finance Act, 1994, no penalty under Section 76, 77, or 78 can be imposed if the assessee proves that there was a reasonable cause for default or failure under these sections. Section 80 does not have a mention of Section 75A and therefore, it can be said that Section 75A penalty is not covered under Section 80. Even if there were a reasonable cause for default under Section 75A, penalty would be levied. In Ashwani & Associates v. Commissioner of Central Excise, New Delhi [(2000) 118 ELT 57 (Tribunal)], it was observed that it is mandatory on the part of revenue to follow the principles of natural justice i.e. audi altarem paartem rule meaning that other party should be heard, before imposing any penalty and provide an opportunity to assessee to prove that there was a reasonable cause. In CCE, Bhubaneswar - II v. Tyazhpromexport [(2003) 157 ELT 576 (CES-TAT, Kolkata)], it has been held that there cannot be an intention to evade Service Tax by a non-resident foreign company which is under the direct control of the Ministry for Economic Affairs and Trade of Russian Federation. It has been held that when under a contract, taxes payable in India were to be borne by the Indian company and when there was some dispute regarding the payment of tax on the services which were being provided and when the matter was resolved, immediately the taxwas paid with interest, there was a reasonable cause under Section 80 for failure to deposit Service Tax and penalty was not imposable. In R.B. Bahutule v. CCE, Mumbai [(2004) 166 ELT 233 (Tribunal, Mumbai)], it was held that the adjudicating authorities do not have a discretion for not imposing penalty for not applying for registration for Service Tax purposes. Section 75A or Section 80 does not allow any such discretion to the adjudicating authorities. They have discretion not to impose any penalty for delay in paying Service Tax and delay in furnishing returns but they have no such discretion for not imposing or reducing penalty for failure to apply for registration. The power to search for documents, papers or things is contained in Section 82 of the Finance Act, 1994 subject to the provisions of Code of Criminal Procedure, 1973. As per Section 82 of the Finance Act, 1994, This section provides for search of documents, books or things by Commissioner of Central Excise or any other officer authorized by him. The pre-condition to search is that the CCE should have reason to believe that there are certain books etc., in secret possession at any place which may be useful for any proceedings under this Act.Service Tax Penalties
A. Kiran Kumar
(Manager - Indirext Taxation)
(156 Points)
Replied 29 April 2009
| Originally posted by :Ram kr. | ||
| " | Dear Friends, This half yeary service tax return last date on 25th April (Saturday). Thats why i have deposited service tax return on 27th April Monday as per service tax rule but our Service tax inspector denied to accept service tax return. He said you can deposit service tax return alongwith Rs500/- late fee. Is any Trade notice published by Service tax department in this regard. Pl. tell. Thanks |
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Dear Mr. Ram
Service Tax returns can be filed on next working day immediately following the holiday. Please find the attached relevant circular.
Ram kr.
(Buisness)
(883 Points)
Replied 01 May 2009
Dear Mr. Kiran,
Do you have a latest circular in which return can be filed on next working day. This circular belongs to public holiday and issued 2003. Is Saturday will be also count in public holiday.
Thanks
shijo
(Accountant)
(40 Points)
Replied 28 April 2010
| Originally posted by : Ram kr. | ||
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Dear Friends, where can we pay the penalty amount ?and is there any separate form to pay penalty ? |
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Manoj Kumar
(Accountant & Tax Consultant)
(40 Points)
Replied 23 October 2011
| Originally posted by : Ram kr. | ||
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Dear Friends What about the advance payment recived by the service provider in case of construction industry. This is a new number and 1st bill is raised on 14th Oct 2011. The Advance Payment recived upto 3oth September 2011 is 1238000.00. Do the party need to pay service tax on the advance recived by him.
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