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service tax penalty

Atul Gupta (Service) (49 Points)

04 October 2008

Is service tax less/not paid in one quarter/month & paid in next quarter/month is the person liable for penalty under the service tax act.

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Sanjive (PCC student) (61 Points)
Replied 04 October 2008

Originally posted by :Atul Gupta
"	Is service tax less/not paid in one quarter/month & paid in next quarter/month is the person liable for penalty under the service tax act.	"

There is no penalty on late payment of service tax, however, interest will be levied on the delayed payment. Rate of Interest to be charged on delayed payment is 13% pa.

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CA PRAMOD SARAOGI (Chartered Accountant) (1113 Points)
Replied 04 October 2008

CIRCULAR NO. 97/8/2007-ST, DATED 23-8-2007 Delay in payment of service tax, including a part thereof, attracts simple interest in terms of section 75 of the Act. The rate of interest is as prescribed from time to time, in accordance with this section. At present, the rate of interest is 13% per annum (Notification No. 26/2004-ST, dated 10-9-2004). Further, failure to pay service tax also attracts a penalty under section 76 of the Act, which shall not be less than Rs. 200 for every day during which such failure continues or at the rate of 2% of such tax per month, whichever is higher, starting with the first day after the due date till the date of actual payment of the outstanding amount of service tax. However, such penalty would not exceed the service tax payable. ------------------------------------------------------------------------------------------------------------ As per section 80, it has been provided that notwithstanding anything contained in the provisions of section 76, section 77 or section 78, no penalty shall be imposable on the assessee for any failure referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure. ------------------------------------------------------------------------------------------------------------ No penalty if tax is paid before issue of show cause notice In a number of cases a view is taken by the Tribunal and even the Supreme Court that No penalty shall be leviable if tax is paid before issue of show cause notice.