Service tax query

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Accountant
396 Points Joined August 2010

Dear sir,

One of my neighbour  is in a business of Pandal and shamiana. They have crossed the turnover limit 02 year back. but due to lack of knowledge they did'nt registered with service tax department. Now antio evasion people went to them and they served them the notice.

After receiving the notice my neighbour took the service tax registration.

Now anti evasion people are asking them to pay service tax.  SINCE THEY HAVE NOT RECOVERED ANY SERVICE TAX FROM THEIR CLIENTS , THEY ARE IN A DILEMA.

So, my question is whether they will have to pay service tax for last 02 year , because they have not taken registration at that time. OR THEY WILL ONLY HAVE TO PAY ONLY INETREST FOR NOT TAKING REGISTRATION ON TIME.

PLEASE SUGGEST.

THANKS AND REGARDS

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On 26 June 2013 at 16:15 Report
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B.com ACA
5923 Points Joined December 2011

See As per Expl to Sec 68(1), liabilty to pay ST is statutory in nature and not contingen....therefore, it is immaterial that the ST has been recovered or not from service receiver......so your neighbour liable to pay ST with Interest ....however a waiver application for penalty be made giving the reason of assessee's ignorance of ST law....Further, no benefit of VCES,2013 can be taken because the deptt already issued show cause notice....

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On 26 June 2013 at 16:27
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CHARTERED ACCOUNTANT
396 Points Joined August 2010

Entired consideration has to be considered to be inclusive of service tax and service tax should be calculated by back calculation.(Since not recoved from party)

Further, benefit of vces can be availed if option if notice is issued after 28.02.2013.

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On 26 June 2013 at 22:14
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GST Advocate
15220 Points Joined January 2009

You should pay the service tax for last 2 years may be interest can be waived on the ground of sympathy.

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On 27 June 2013 at 13:57
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CHARTERED ACCOUNTANT
396 Points Joined August 2010

Interest can be waived only under vces scheme.

There is no power to waive interest on the ground of symathy, only penalty can be waived.

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On 27 June 2013 at 20:06


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