Reasonable cause u/s 80
This query is : Resolved
20 March 2015
U/s 80 of Finance Act- Penalty u/s 76 & 77 shall not to be imposed if the assesse proves that there was "reasonable cause" for failure.
Case of my Client-
1. my Client is civil sub-contractor in a reputed public limited company. He is providing mainly works contract service to main contractor.
2. As per work order received & signed by both parties, Service tax shall be extra over and above the rate mentioned in WO.
3. My client did not charge any Service tax and did not issue any tax Invoice. Hence he did not deposit the same even he did not get himself registered in FY 2012-13.
4. Main Contractor has processed his bill mentioning Service Tax as ZERO. Copy of WO & all processed bills are available. Processed bills mean copy given by Main contractor to sub contractor mentioning ITEM WISE details of work done.
5. In FY 2013-14, he got himself registered and start charging Service tax & paying the same.
6. Notice received for FY 2012-13 for non payment of Service Tax.
Please suggest, on ground of facts that a) he was of belief that no ST will be payable if he has not claimed the same from Service Recipient & Service Recipient has not paid the same. Same can also be established from WO & copy of processed bill received from Service Recipient b) since he has not issue any tax Invoice, no CENVAT has been taken by main contractor
Can it be established that such failure is due to "Reasonable Cause"
Case of my Client-
1. my Client is civil sub-contractor in a reputed public limited company. He is providing mainly works contract service to main contractor.
2. As per work order received & signed by both parties, Service tax shall be extra over and above the rate mentioned in WO.
3. My client did not charge any Service tax and did not issue any tax Invoice. Hence he did not deposit the same even he did not get himself registered in FY 2012-13.
4. Main Contractor has processed his bill mentioning Service Tax as ZERO. Copy of WO & all processed bills are available. Processed bills mean copy given by Main contractor to sub contractor mentioning ITEM WISE details of work done.
5. In FY 2013-14, he got himself registered and start charging Service tax & paying the same.
6. Notice received for FY 2012-13 for non payment of Service Tax.
Please suggest, on ground of facts that a) he was of belief that no ST will be payable if he has not claimed the same from Service Recipient & Service Recipient has not paid the same. Same can also be established from WO & copy of processed bill received from Service Recipient b) since he has not issue any tax Invoice, no CENVAT has been taken by main contractor
Can it be established that such failure is due to "Reasonable Cause"
20 March 2015
Dear Shweta
WEF 01-07-2012, the services of sub contractor to main contractor is exempt vide entry no 29h of notification 25/2012 provided the services rendered are works contract service where there is provision of goods along with supply of services. See whether your client's activity fall in to the category of works contract.
Your query is not clear whether you want to contest against penalty u/s 76 & 77 or to contest against demand of service tax. Pls clarify for further opinion. casrinivasantry@gmail.com
WEF 01-07-2012, the services of sub contractor to main contractor is exempt vide entry no 29h of notification 25/2012 provided the services rendered are works contract service where there is provision of goods along with supply of services. See whether your client's activity fall in to the category of works contract.
Your query is not clear whether you want to contest against penalty u/s 76 & 77 or to contest against demand of service tax. Pls clarify for further opinion. casrinivasantry@gmail.com
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