E- payment of service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 December 2014 Dear Sir,

E-payment of service tax has been made mandatory from 1st October 2014. What is the penalty for non-compliance and is there a remedy in case of non-compliance.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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12 December 2014 they may not accept manually so no q of non compliance comes

Rupesh Jain

Rupesh Jain (Expert)
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12 December 2014 its mandatory for make payment then manual challan not take by bank.

Querist : Anonymous

Querist : Anonymous (Querist)

14 December 2014 Payment has been made for two months through normal challan. What is the penalty for non compliance

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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21 July 2024 Yes, e-payment of Service Tax was made mandatory from 1st October 2014 in India. Non-compliance with the e-payment requirement may result in penalties under the Service Tax rules. Here’s an overview of the penalty for non-compliance and possible remedies:

### Penalty for Non-Compliance:

1. **Late Payment Interest:** If Service Tax is not paid electronically by the due date, interest is levied on the outstanding amount. The interest rate is prescribed under Section 75 of the Finance Act, 1994. As of recent updates, the interest rate is generally 15% per annum, compounded quarterly.

2. **Late Filing Penalty:** If the Service Tax payment is not made on time, there could be a late filing penalty. The penalty amount can vary based on the duration of delay and the total amount of tax due.

3. **Prosecution:** In severe cases of persistent non-compliance or deliberate evasion, prosecution under the Service Tax laws may be initiated. This can lead to legal proceedings and additional penalties.

### Remedies in Case of Non-Compliance:

1. **Regularization of Payment:** If a taxpayer fails to make e-payment on time, they should immediately pay the outstanding tax along with interest through the authorized e-payment channels. This helps in avoiding further penalties and legal consequences.

2. **Rectification:** Taxpayers can rectify any errors in e-payment and ensure compliance for subsequent periods. Rectification can be done through the ACES (Automation of Central Excise and Service Tax) portal or other designated platforms.

3. **Voluntary Compliance:** Taxpayers can voluntarily disclose any non-compliance or errors to the tax authorities and rectify them promptly. Voluntary compliance can sometimes mitigate penalties if the issue is resolved transparently and proactively.

4. **Legal Consultation:** In cases of serious non-compliance or legal proceedings, seeking advice from a tax consultant or legal expert can provide guidance on the best course of action to rectify the situation.

### Conclusion:

It's crucial for taxpayers to adhere to the e-payment requirements for Service Tax to avoid penalties and ensure timely compliance with tax regulations. Regular monitoring of tax liabilities, timely payment, and accurate reporting through the designated electronic platforms are essential practices to maintain compliance. Keeping updated with any changes or notifications from the tax authorities helps in staying compliant with the evolving tax laws.

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