Penalty for delay in filing service tax return for nil STL

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CA Sunil (Querist)
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25 May 2010 Dear Friends,

Company X has to pay Rs. 1 lac as service tax for the FY 2009-10.It has more than 7 lacs as CENVAT credit is available in the books. Now the company has availed 1 lac as CENVAT credit and hence paid nil service tax for the year.

And now there is a delay in filing service tax return by almost 1 month, kindly let me know whether penalty is applicable or not, because in my case there is no tax liability to pay service tax due to availment of service tax.

A reply in these regard will be highly appreciated.

Ram Avtar Singh

Ram Avtar Singh (Expert)
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25 May 2010 Delay in filing of return: The return is required to be filed by the stipulated date as mentioned at para 6.1 above. Delay in filing of return attracts late fee. The late fee presently prescribed vide rule 7C of the Rules, is (a) Rs 500 for delay upto 15 days; (b) Rs 1000 for delay between 15 days and 30 days; and (c) Rs 1000 plus Rs 100 per day beyond 30 days, till the filing of return, not exceeding Rs 2000/-. To avoid late fee, the taxpayer must ensure timely filing of return. In case of returns filed late, the appropriate late fees should be paid at the time of filing the return, without waiting for any communication or notice from the department. Mere non-submission of evidence of payment of late fee along with the return is, however, not a ground for refusal to allow filing of the return.

CA Sunil

CA Sunil (Querist)
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25 May 2010 Many thanks for such a quick reply,

The penalty is leviable irrespective of whether one has nil service tax liability, nil return or not.

Thanks and Regards

Sunil Kumar .O

CA Sunil

CA Sunil (Querist)
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25 May 2010 Many thanks for such a quick reply,

The penalty is leviable irrespective of whether one has nil service tax liability, nil return or not.

Thanks and Regards

Sunil Kumar .O

Shyam Lal Naik

Shyam Lal Naik (Expert)
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25 May 2010 Late fee is leviable, irrespective of liablity to pay tax in cash. Utilisation of Cenvat is merely an mode of Service Tax Liability. It is incorrect to say that, there is no Service Tax Liability, as there is sufficient Cenvat.

Late fee payable, unless there is reasonable cause.

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