Penalty for late filing of service tax return


Querist : Anonymous (Querist) 01 June 2012

An assessee has not filed Service Tax return on Rent received on Immovable Property as stay was granted to Tenant by court for non payment of Service Tax as such. Tenant in turn gave confirmation to Landlord that he is not required to pay Service tax and any liability thereof will be reimbursed by tenant. Now Tenant is ready to pay service Tax + intt etc. to Landlord.

Whether tenant is bound to Penalty u/s 70 for late filing of return or same is not required as per clarification / amendment / notification etc. given in budget 2012 and thereafter.

Dayal (Expert)
02 June 2012

C.3 Penalty waiver for renting of immovable property service:
17. Recently, Delhi High Court while examining the issue of constitutionality of service tax on renting of immovable property service in the matter of Home Solutions Retail Vs UOI observed that ‘on the question of penalty due to non-payment of tax, it is open to the Government to examine whether any waiver or exemption can be granted’ [para 73]. Subsequently, in the matter of Retailers Assn. of India Vs Union of India, Honorable apex court, had ruled on October 14, 2011, that litigants should pay 50% of the arrears within six months in three equated installments. For the balance, solvent surety should be furnished to the satisfaction of the jurisdictional commissioner.
18. Against the above backdrop, it is proposed that penalty may be waived for those taxpayers who pay the service tax due on the renting of immovable property service (as on the sixth day of March, 2012), in full along with interest within six months. Section 80A is being introduced for this purpose. Those who fail to avail the benefit will be treated as if this section did not exist.

Querist : Anonymous (Querist) 02 June 2012

My basic query remain untouched. There are 2 types of penalty : one is for late payment of tax which is different than late payment interest. Other Penalty is for late filing of Return. In above said case kindly give a specific reply as whether Penalty for late filing of service Tax return is applicable or not ?

Dayal (Expert)
02 June 2012

By virtue of Section 74 of the Finance Act, 2011, Section 70 has been amended so as to revise the maximum amount of such late fee from Rs. 2000/- to Rs. 20,000/-. This amendment has been made effective from 08.04.2011

The late fee payable as prescribed under Rule 7C of Service Tax Rules, 1994 is as follows:

1.For delay of 15 days, late fee will be Rs. 500/-.

2.For delay over 15 days but not later than 30 days, late fee will be Rs. 1000/-.

3.Beyond 30 days, the late fee payable is Rs. 1000/- plus Rs. 100/- per day from 31st day till date of the furnishing of ST-3 Return.

4.However, the maximum amount payable shall not exceed Rs. 20,000/- .


1.If Service Tax Return is not filed within prescribed period, penalty is leviable under Section 77(2) of the Finance Act, 1994 which can be up to Rs. 10,000/-.

2.The penalty can be waived under Section 80, if assessee proves that failure was due to reasonable cause. If late fee is paid, penalty will not be imposed.

ANKUR (Expert)
23 November 2012

You may not file returns for earlier years. this would attract penalty clause for late filing of returns. Rather show the rent paid for earlier years in the present return. This should suffice. You may also send a letter to the department informing the rent paid for earlier years.

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