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Query on service tax

jyoti (Article) (105 Points)

10 December 2011

please help me out to solve the qurey on service tax payment.

If a propritory concern(Service Provider) registered in march 2011.It raises a bill of 100000 in March.So it is not lible

to pay service tax .It did not filed NIL return till date.What will be consequences of it? And what are the remidies for it? the penalty is Rs2000 or20000?

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6 Replies

mohammed lateef (article ) (101 Points)
Replied 10 December 2011

Hi jyothi

Irrespective of whether nil or payable you need to file quarterly return for propreitory concern and you have to file return coz u were registered for service tax in march-2011 last day for filing return for march is 31st march -2011, after that u have to pay interest on amount payable since u dont have any amt to be paid no interest charged, only u need to pay penalty which is 31 days from the expire of due date is 1000 rupees and above that 1000 rupees plus(+) each day 100 rupees.

And from 1.4.2011 the interest rates have also changed. please see online for further clarification.

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KARANDEEP,CA,B.Com,CS FNL (JOB) (457 Points)
Replied 11 December 2011

Dear Jyoti,

Now, As per Section71 (C) of the Finance Bill 2011 proposed vide Union Budget on February 28, 2011; ‘in Section 70 (1) of the Finance Act, 1994, for the words “two thousand rupees”, the words “twenty thousand rupees” shall be substituted’.

After enactment of Finance Bill 2011, the following position will emerge out:

Period of Delay	Penalty/late fee before finance bill 2011	Penalty/late fee After finance bill 2011
for delay up to 15 days	INR 500	INR 500
for delay beyond 15 days but up to 30 days	INR 1,000	INR 1,000
for delay beyond 30 days	INR 1,000 + INR 100 per day (from 31st daysubject to a maximum amount of Rs 2000.	INR 1,000 + INR 100 per day (from 31st day Subject to a maximum amount of Rs 20000.

‘Provided also that where the gross amount of service tax payable is nil, the Central Excise officer may, on being satisfied that there is sufficient reason for not filing the return, reduce or waive the penalty’.

I hope your query is resolved.

Thanks & Regards

Karandeep

CA Unnikrishnan Nair N (Chartered Accountant) (2083 Points)
Replied 12 December 2011

Rs.20,000/- is maximum penalty. but CE officer has power to condone delay in filing of Nil returns.

CA Prabhat Gupta (Manager (Indirect Taxes)) (821 Points)
Replied 12 December 2011

Agree with Mr. Nair. But see if you have charged Service Tax on the bill issued in March 2011. In case Service Tax is charged as per the bill issued to the Service Recepient, the same is required to be paid first along with interest at prevailing rate.

In any case, where a service provider is registered, Service Tax Return has to be filed, no matter whether it is Nil return or not. Late fee would be applicable in this case as shown in the sheet posted by Mr. Karandeep, i.e., to the maximum of Rs. 20000/- depending upon the period of delay. This could be waived at the discretion of Central Excise Officer. You may contact your Range Superintendent and request him to waive the late fee.