Consequences

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CS PRIYANK BOTHRA (Querist)

25 July 2012 What are the consequences a service recipient & service provider has to face when the service provider neither submits service tax return nor deposits the tax to the government????

(Service recipient has got all the required documents viz, bill, invoice, etc...)

If possible please suggest me with relevant case laws

Suresh Mittal

Suresh Mittal (Expert)

26 July 2012 If SR has made payment of ST to SP and the liability is on SP, the SR will not face any consequence if he has with him all required documents including invoice with all the particulars mentioned thereon as per Rule 4A of STR,1994.

CA.Sourabh Sethia

CA.Sourabh Sethia (Expert)

26 July 2012 Consequences on the SP are
Penalties as follows
Penalty For Late Payment Of Service Tax

The penalty for late payment of service tax is simple interest at the rate of 24% p.a. by which crediting of tax or any part thereof is delayed. (Sec. 75). Further, the Finance Act, 2002 has proposed to reduce the rate of interest from 24% p.a. to 15% p.a. for the period for which the payment of Service Tax is delayed.

Panalty For Failure To Pay Service Tax

Penalty for failure to pay service tax is as follows:- In addition to paying Service Tax and interest U/S 75, not less than Rs 100/- but which may extend to Rs 200/- for every day during which the failure continues (Sec 76). However, the penalty should not exceed the amount of Service Tax that the assessee has failed to pay.

Panalty For Failure To Furnish Return

The penalty for this may extend to an amount not exceeding Rs 1000/- (Sec 77).

Penalty For Suppressing The Amount Of Taxable Services

The penalty for this is as follows:-In addition to Service Tax and interest a sum, which shall not be less than but which shall not exceed twice the amount of Service Tax that is sought to be evaded (Sec 78).

Penalty For Failure To Comply With Notice Of Penal Demand

For this, the penalty is a sum not less than 105 but which shall not exceed 50% of the amount

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