consequences for non payment of service tax

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Subhash Sood

Finance Professional

37 Points Joined July 2015

I am a consultancy service provider. My annual turnover on accrual as well as on cash basis in FY 2012-13 was 6 lakhs so I didn't apply for registration under service tax rules. in FY 2013-14 my turnover on accrual as well as on cash basis exceeded RS 10 lakhs. I registered myself with service tax on 1st April 2014. My turnover in FY 2014-15 as also in FY 2015-16 has been less than 10 lakhs on either basis. Nature of services provided required me to incur travel and lodging boarding expenses. I have 2 queries as under:-
1. What penalty and interest I am liable to pay on the service tax not paid for the amount exceeding 10 lakhs for the FY 2013-14.
2.Can I treat actual turnover by reducing the amount incurred on travel, lodging and boarding as such amount is not a part of any financial benefit in the services provided.
Thanks
Subhash sood

Replies (3)

CA PRAMOD SARAOGI

Chartered Accountant

1113 Points Joined December 2007

The Gross amount charged for the consultancy services rendered by you is the value of the taxable services on which service tax is to be paid. Reimbursible expenditure such as travelling, lodging or boarding expenses shall form part of the Gross amount and is not allowed to be deducted from the GAC. The maximum penalty for not obtaining the registration is Rs. 10000. The maximum penalty for not filing /late filing the return is Rs. 20000.

Subhash Sood

Finance Professional

37 Points Joined July 2015

Thanks Mr.Saraogi, for valuable guidance. Kindly please take some time and trouble to address two more queries on the subject.
1. What I am liable to pay for the amount exceeding Rs 10 lakhs pertaining to FY 2013-14 for which service tax is not paid. Registration was obtained on 1st April 2014
2. I understand that once the limit of RS 10 lakhs is exceeded in any FY then one is required to pay service tax for subsequent years even if the turnover in such years is less than 10 lakhs. In this perspective shall there be any obligation to pay service tax for FY 2014-15 and 2015-16 in which years the turnover was less than 10 lakhs. Important is to mention that registration date is 1st April 2014.
Thanks in advance

DURAI

M.Com MBA CA Final Student

47 Points Joined April 2012

Interest payable on late payment of service tax where annual taxable sevices is less than 60lakhs

For the first 6months - 15% if taxable turnover exceeds 60lakhs it is 18%

For the next 6months - 21% if taxable turnover exceeds 60lakhs it is 24%

Beyond 1year - 30%

as rightly said, penalty chargable maximum of Rs.20000 for not filing ST 3 on half yearly basis and penalty chargable maximum of Rs.10000 for not obtaining registration in time.