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Service tax - penalties and interest

Nikhil Kaushik (Fellow CA) (85319 Points)

20 November 2011

Dear All,

One of my friend is offerring professional services ( Started in April 2010)

in FY 2010-11, he earned fees amounting to Rs 1725800.

He crossed the limit of Rs 10 Lakh in Nov 2010.

However, due to wrong advice by his CA, he didn't pay service tax.

Now, he has taken the service tax registration and is planning to clear the service tax dues.

Would be great if you could help me compute the amount of service tax liability plus the interest and penalities..

Regards

Nikhil

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12 Replies

CA Sripal Jain (Associate Finance) (709 Points)
Replied 20 November 2011

hey the service tax liability is 177758 and penalty i can tel only if the default period is mentioned in your question,assume he dint pay service tax till march ...so from nov to march it comes to five months

therefore penalty is 200 per day or 2% whichever is higher

200*151=30200

177758*2% *5/12=17775

therefore 30200 wil be interest liability

regards

sripal jain

shobhit jain (article) (23 Points)
Replied 20 November 2011

hey! but as per my view for non-payment of s.tax it would b also liable for penalty alongwith interest. penalty is correct but interst amt will b:- 13%&p.a. on s.tax so for 5months it would b 9629/-

shobhit jain (article) (23 Points)
Replied 20 November 2011

also if the s.tax liabilty doesnt exceed 10 lac for previous year then for next yr it would b not liable for s.tax upto 10 lac as per ssi exemption. so also see into this criteria.

EKALABYA TALUKDAR (SERVICE TAX CONSULTANT) (666 Points)
Replied 28 November 2011

FROM FIRST APRIL 2011. THE RATE OF INTEREST IS MODIFIED TO 18% PAR ANNUM <> VIDE NOTIFICATION NO 4/2011 DATED 01.03.2011

AMIT GOYAL (ACCOUNTANT) (140 Points)
Replied 02 December 2011

WHAT WIL BE THE PENALTY OF SERVICE TAX IF THE SERVICE TAX NEITHER DEPOSITED NOR FILE SERVICE TAX RETURN.

PLS GUIDE ME.

shobharani.s (Sr accounts Executive) (40 Points)
Replied 07 March 2012

what will be the penalty of service tax or what is the rate of intrest for delayed pament?

kindly advice me please.

shobharani.s (Sr accounts Executive) (40 Points)
Replied 07 March 2012

What are the examption of TDS on Salary?

How we can calculate TDS on salary?

pls help me.

shobharani.s (Sr accounts Executive) (40 Points)
Replied 07 March 2012

what is the normal tax for salary?

OFFICESELVA (Service) (515 Points)
Replied 07 March 2012

Can u be eloborate the question?

(Guest)

Dear professionals ,

While reading Service tax for CA final I have come across a very strange and silly doubt

I know this may sound stupid to learned professionals but

PLESE CLARIFY

The levy of service tax derives its power from entry 97 of the union list(or entry 92-c in opinion of a few)

Chapter V of the Finance Act ,1994 enumerates the detail

Further Chapter V extends to whole of India except the state of J &K(JURISDICTION)

Thus services provided in J&K and OUT OF INDIA are not covered by the ambit of the charging section( as I was taught the place of providing service is the relevant place for deciding jurisdiction)

So, SERVISES PROVIDED OUT OF INDIA ARE NOT COVERD UNDER THE AMBIT OF THIS LEVY

Then, Why on earth have they framed “EXPORT OF SERVISES RULES” describing about which service is a service exported is understandable but if further talks about rebate and all

How can rebate be provided on serves which is not even livable to tax

Plese Help