Penalty on service tax late payment

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 August 2011 There was a delay in service tax payment and interest on the same is paid but after that we come to know that as per section 76 of service tax act we are liable to pay penalty also.
Now, what should i do, should i wait for show cause notice by department or to make provision.
The liability occured on 30.09.2009 and auditors are saying to provide the provision.

Preety Parik

Preety Parik (Expert)
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05 August 2011
Yes penalty is attracted, pay the penalty on your own. It has to be paid @ 2% of the tax per month on the first day after the due date till the date of payment of TAX (period betweeen the day after the due date to date of payment made of service tax) or Rs.200 perday during which the failure continues whichever is higher. Since u have already paid the tax, just calculate the penalty and pay it.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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05 August 2011 Question is whether penalty is to be provided in the accounts.
My observation is no need to book the penalty. On the other hand, treat it as a "contigent liability not provided for" and accordingly mention in the 'notes forming part of the accounts.

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