We started our Manpower recruitment business in the month of October 2008. Due to ignorance and mistakes of our accounts executive ,we started raising invoices using unregistered service tax number.(infact our executive used some PAN No.with ST001) and told us that he will get it registered soon. so we started collecting service tax. We collected total service tax around 56000 from oct to december 2008. Now our customer called us a day back and asked for the service tax papers which we dont have. now we have applied for a new service tax number and requesting our client to either use our new service tax number or get all his service tax refunded from us. We are very disturbed and confused as we dont know how to handle this crisis. client is calling us and thretening continuously for heavy penalty and interests on our income too.
18 January 2009
It is important that you realise your mistake and wants to rectify that. Then there wont be any problem. The service tax registration you are using on the invoice, will be the same one which you will get from the department. You can tell your clients that you have already applied for ST registration, and the moment you get the registration, you will pay the service tax amount. You can show them a copy of your application form etc. There is no reasons for your clients to call you and threaten you. The service tax is required to be paid monthly. You have started your work only in Oct, 2008. Even if you pay your taxes in january, there is hardly a delay of a few months, and hence interest liability will not be very heavy. Just take your regstration, Pay the taxes and enjoy. Nothing to worry much.
18 January 2009
I completely agree with the views of Mr. Rajesh Kumar. He has explained you all things in details. No need to worry. Just follow his suggestions.
19 January 2009
Continuing, if you are non corporate assessee Service Tax Payment is quarterly otherwise, as Mr.Rajesh Kumar rightly said, monthly. Further interest for delay in ST payment is 13% per annum calculated for the number of days.
19 January 2009
Thank you very much Mr Rajesh and all who have given me the right way to handle this crisis. But in my case the issue is not of taking servixe tax number on the same PAN number which we have been using in our invoices but to take the service tax number on the different PAN number , since the person who used his PAN number has already left us and we dont want to use his PAN number anymore. So this is the problem. So kinldy advice.
19 January 2009
The issue gets the final twist. You said your executive has used some PAN with ST001 to charge your client with service tax. Whose PAN is this? What is the constitution of your company? Do you have your own PAN or not? So the entire episode was enacted with the connivance of you. How may clients were charged with service tax under this PAN? These are the probable question to be asked. Be aware that you are liable for the ST on the charges collected by you. You quantify the amount first. Then get your own PAN if you don't have one already. Get registered under the PAN. Pay all the ST collected under the banner of your company along with interest under the new PAN. While filing the ST3 return explain in detail every thing in the covering letter. In my personal opinion if you pay all the ST collected with interest only the procedural lapse remains which can be condoned by the proper authority. If possible also find the details of the forged PAN from www.incometaxindia.gov.in and let all of know the result.
As per the given facts, just apply for the service tax registration with the PAN of your company or firm whatever. And intimate the clients that we have applied for registration for service tax. Pay all the service tax collected with the interest as perscribed by the Act.
The use of improper PAN on the invoices does not matter so hard. Convince your client with your own skill. And keep doing great. Don't worry and do the right thing by admitting the mistake to your clients.
CAclubindia
