Saturday, April 21, 2012

Penalty for late filing of Service Tax Return ST-3


on Saturday, April 21, 2012


Under the existing scheme of law, Rule 7 of the Service tax Rules, 1994 read with its sub-rules deals with the provisions relating to the service tax return.

As per Rule 7C; where the return prescribed under rule 7 is furnished after the date prescribed for submission of such return, the person liable to furnish the said return shall pay to the credit of the Central Government, from the date prescribed for submission of return i.e. 25th of the month following the particular half year till the date of furnishing of the said return, the following penalty:

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 has emerge out:

4.Penalty on late filing of service Tax return 

After enactment of Finance Bill 2011, the following position has emerge out:
Period of Delay
Penalty/late fee before finance ACT 2011
Penalty/late fee After finance ACT 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’.
‘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’.

Analyzing the effect of this amendment it is clear that the penalty in respect of the non-furnishing of return in due time limits, would now result as multifold financial impact on the assessee as the same is increased to 10 times of the existing amount prescribed. Therefore, if an assessee has not filed his/her return in due period, the financial impact in respect of penalty could be more than the actual tax liability.

Further, as per Notification No. 05/2006-ST, in case any assessee has discontinued his/her business and has to surrender the service tax registration and upon submitting the application for cancellation of registration the Superintendent of Central Excise shall ensure that the assessee has paid all monies due to the Central Government. As per the procedure, the assessee has to file the return for at least two immediately preceding half years. Normally, in such a case, the assessee, due to discontinuation of his/her business, stops filing the returns. Now, as a result of the amended provisions relating to penalty for non-submission/ delayed submission of returns, the assessee in such cases could end up in paying the penalty portion which will be multifold the service tax liability.

Due Date for Filing October,12 to March 2013 ST-3 Service Tax return is 10.09.2013

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  1. how to pay penalty ( online) for late filing of service tax return
    bank of india site have only two options -payment of service tax and interest for late deposit of tax.

    ReplyDelete
  2. https://cbec.nsdl.com/EST/InputPageForEPaymentServlet

    ReplyDelete
  3. i m a disco dancer

    ReplyDelete
  4. disco dancer. me 2!!

    ReplyDelete
  5. i am a manufacturer, but i am trading some imported product with intimation to department. Can i liable to pay service tax on that?

    ReplyDelete
    Replies
    1. Trading in imported goods attracts sales tax only not service tax. But your business transactions to be analysed and if there is any service aspect then you will be liable to pay service tax.

      Delete
    2. trading in imported products attracts only sales tax but not service tax

      Delete
  6. sir, in my NBFC, interest income does not exceed 10 lac does it carry any service tax? does interest from own funds req. service tax to be paid?

    ReplyDelete
  7. I had got Service Tax Registration Number during the year 2008 in the name of my Firm.

    However, I did not start the business and did not collect any service tax. I shut the business within 3 months.

    However, I did not DE-REGISTER the Service Tax Number, as I was not aware of the fact and I did not file even NIL returns, because I actually DID NOT render any service.

    It is almost 4 years now.

    Yesterday, I got a call from Service Tax Department asking me to file returns, pay huge penalty of thousands of money and de-register the service tax number.

    What recourse do I have?

    Is it not abuse of law.

    There should be no tax and penalty for genuine reasons.

    Why did the authorities did not contact me before?

    Why did it take 4 years?

    Can I seek protection under Limitation Act.

    Kindly, clarify, as I have zero knowledge about tax and if I approach the auditors/CA they ask thousands of money.

    ReplyDelete
    Replies
    1. If person has shut down his business or in case of nil return , it has been generally observed that department is not charging any fees for non filing of service tax return .

      so you should ,contact department employee and ask him to help in cancellation of service tax number.

      Delete
  8. My service tax number taken on Sep-2011, since then not return have been filed, due to limitation of Rs. 10 Lakh exemption. My questions are that:
    1) Whether I have to file all the return, and is it mandatory?
    2) If there is any penalty then what should be the gross penalty amount ?

    Please advice me.

    ReplyDelete
    Replies
    1. yes return filling is mandatory. if you're taking exemption of rs 1000000 then there would not be any penalty because you have to file nill return. and on filling of nill return there no any penalty

      Delete
  9. Sir, please tall me how much penalty for late service tax return, it's my first time. some body told me that service tax return file will be
    yearly. so how can submit return file to gov.

    ReplyDelete
  10. My Client did not filed his service tax return from 2008-09 to 2011-2012 how much late fine should be paid by him

    ReplyDelete
    Replies
    1. presently a VDS scheme is offered by department without any penalty ,so you should file return under that offer

      http://www.simpletaxindia.net/2013/05/service-tax-voluntary-compliance_15.html

      Delete
  11. I got service tax no on 03 Nov 2008
    I did not start any business and did not file NIL return from 2008 to date.
    I was not aware of filling NIL retun
    Now I want to start my business on same firm.
    Should I have to pay penalty or I can file NIL return for 4 years with zero penalty.
    Please advice what should I do

    ReplyDelete
    Replies
    1. Presently there is a VDS scheme is running under which no penalty for previous returns are applicable ,so you can avail the benefit of that scheme

      http://www.simpletaxindia.net/2013/05/service-tax-voluntary-compliance_15.html

      Delete
  12. Dear Sir or Madam,

    I started my business in 2010 , registered my company "Airspace Technology" a website for aviation community.

    I invested 1.5 lacs and i operated that business for 1 year. It was totally flop business and i made 147000 INR loss. i just collected 3000INR from one company. after wards my business was in loss and i have to shutdown it.

    Afterwards i started my service.

    I never filled TAX return since i was not aware of filling TAX return.

    Recently i asked one CA from our locality , i told him the fact but he replied that now i have to pay huge income tax return as penalty.

    SO what should i do now, should i go to the TAX department for paying penalty? i never made anybusiness and i made 1.5 lacs approx. loss....!!!

    What should i do here???

    Can you please comment on this?

    Regards












    ReplyDelete
    Replies
    1. for individuals, return is required to be filled only if they have income more than taxable exemption limit. Since you have loss in your business ,so return is not required from you.

      Delete
  13. DEAR SIR/MADAM,

    SERVICE TAX RETURN OCT TO MAR 2014 CAN I SHOW THE VCES PAYMENT OR NOT. I MADE VCES PAYMENT EARLIER.
    PLS GUIDE US SIR.

    ReplyDelete