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About service tax return

swati (student ca final) (87 Points)

17 December 2011

A person having Registration of service tax provided taxable services in the year 2005-06 and paid service tax amount for which he was liable and filed the return...........but after 2005-06 he did'nt provide any taxable service and also for the same he is not liable to pay service tax till 2010-11, but now in the year 2011-12 he has to pay service tax because again he started to provide taxable service.............now what he should do to file return of service tax as he did not furnish return till 2010-11.... weather any penalty bwill be levied on him for non furnishing return of service tax? if yes then pls tell the consequences.

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4 Replies

CA Harshit Rastogi (Chartered Accountant) (722 Points)
Replied 17 December 2011

iling of service tax returns is mandatory, even it is NIL...You have to file within 25 days...if not then there would be day wise default criteria of penalty....i.e.

<15 days - Rs. 500 per day

>15 days but <30 days - 1000 per day

> 30 days - Rs. 1000 is fix plus Rs. 100 per day or maximum to Rs. 20000

CA Prabhat Gupta (Manager (Indirect Taxes)) (821 Points)
Replied 17 December 2011

Where a registration has been taken under service tax provisions, return has to be filed, whether or not services are provided. Previously maximum late fee for late filing of ST returns was Rs.2000 but, it has been increased to Rs.20000/- per return in Budget 2011.

Penalty Rs.10000/- under section 77(2) may also be levied if the fact of non filing of returns is pointed out by the department. This penalty could be waived if the assessee could prove that failure was due to some reasonable cause (section 80).

In your case, as the returns are not filed for a long period of time, (period of more than 5 years are barred by limitation), late fee for almost all returns would exceed Rs.20000/-.

But at the same time as these are NIL returns you may take shelter under proviso to Rule 7C of Service Tax Rules, 1994. It says that, "Provided also that where the gross amount of service tax payable is nil, the Central Excise officer may, on being satisfied that there is sufficient reason for not filing the return, reduce or waive the penalty."

Hence in my opinion, to avoid Penalty & late fee, you must contact your Range Superintendent and request him to waive the late fee.