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Panelty for delay in service tax

akash gurao (Finance Manager) (40 Points)

27 June 2009

Dear all

i had a one query in service tax in following :

A Pvt. Ltd company start in 2005, He is liable for service tax on transportation and fright.

But company not register for Service tax. After the 4 year Excise audit held in the company and they suggest for Service Tax liability.

Now company register for service tax no. and paid service tax of Rs. 5258/- from April 2006, including interest.

Now service tax department says company liable for Panelty of Rs. 2000/- per return i.e. (6 return x 2000 =12000/-)

let me know about : if i had take the register in this month, and paid service tax liability in within next 3 days after service tax no received, then our company liable for panelty or not.

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5 Replies

akash gurao (Finance Manager) (40 Points)
Replied 27 June 2009

Originally posted by :akash gurao
"	Dear all i had a one query in service tax in following : A Pvt. Ltd company start in 2005, He is liable for service tax on transportation and fright. But company not register for Service tax. After the 4 year Excise audit held in the company and they suggest for Service Tax liability. Now company register for service tax no. and paid service tax of Rs. 5258/- from April 2006, including interest. Now service tax department says company liable for Panelty of Rs. 2000/- per return i.e. (6 return x 2000 =12000/-) let me know about : if i had take the register in this month, and paid service tax liability in within next 3 days after service tax no received, then our company liable for panelty or not.	"

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CA Uttam (Chartered Accountant) (406 Points)
Replied 27 June 2009

Hi Akash,

Service tax penalty raised by the dept is on a/c of non - filing of Half yearly service tax return, it is maximum of Rs.2,000/-.

Your other Query is not clear.

A. Kiran Kumar (Manager - Indirext Taxation) (156 Points)
Replied 27 June 2009

Dear Akash Gurao

Please refer the rule 7(1) of the Service Tax Rules, 1994 "Every assesse shall submit a half-yearly return in Form 'ST-3' --------------------"

As per the above only an assesse will have to file the said returns with the department. In your case you were not an assesse with the department until you get registered with the Service Tax deparment for your service as an assesee. Hence in my view "not filing the returns" for the old period is not amount to penalty.

The above is only my view and subject to the confirmation by any of the professional.

Krunal Raichura (Financial Advisory) (2134 Points)
Replied 27 June 2009

Confirm the penalty, as the act says -

Consequences of non-registration are stated as follows -

Any Person who is liable to pay service tax, or required to take registration, fails to take registration in accordance with the provisions of section 69 or rules made under this Chapter shall be liable to pay a penalty which may extend to five thousand rupees or two hundred rupees for every day during which such failure continues, whichever is higher, starting with the first day after the due date, till the date of actual compliance;