Sonakshi Mangla (Employee) 26 February 2016
We have taken registration as service provider in 2012 but failed to get our ST-1 amended as Service Recipient though we have been depositing S.T & filing returns. Can department impose penalty for not amending our registration certificate u/s 77(a)?
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CA Prakash N (Head - Indirect Tax (GST & FTP)) 27 February 2016
Yes. Any contravention of rule will be penalised under section 77.
However, in practially, we have not seen imposing penalty for not amending receipient services.
Better amend your ST-2 at the earliest.
Venkat (Audit Division at Hiregange & Associates) 11 March 2016
Dear Ms Sonakshi,
As Mr. Prakash said the department can rightly impose such penalty.
Extract of section 77
a[SECTION 77. Penalty for contravention of rules and provisions of Act for which no penalty is specified elsewhere. - (1) Any person,-
(a) who is liable to pay service tax or required to take registration, fails to take registration in accordance with the provisions of section 69 or rules made under this Chapter shall be liable to a penalty which may extend to ten thousand rupees;
Page 21 of 35Chapter V of the Finance Act 1994 - Service Tax
(b) who fails to keep, maintain or retain books of account and other documents as required in accordance with the provisions of this Chapter or the rules made thereunder, shall be liable to a penalty which may extend to 216g[ten]216g thousand rupees;
(c) who fails to-
(i) furnish information called by an officer in accordance with the provisions of this Chapter or rules made thereunder; or
(ii) produce documents called for by a Central Excise Officer in accordance with the provisions of this Chapter or rules made thereunder; or
(iii) appear before the Central Excise Officer, when issued with a summon for appearance to give evidence or to produce a document in an inquiry,
shall be liable to a penalty which may extend to 216h[ten]216h thousand rupees or two hundred rupees for every day during which such failure continues, whichever is higher, starting with the first day after the due date, till the date of actual compliance;
(d) who is required to pay tax electronically, through internet banking, fails to pay the tax electronically, shall be liable to a penalty which may extend to 216i[ten]216i thousand rupees;
(e) who issues invoice in accordance with the provisions of the Act or rules made thereunder, with incorrect or incomplete details or fails to account for an invoice in his books of account, shall be liable to a penalty which may extend to 216j[ten]216j thousand rupees.
(2) Any person, who contravenes any of the provisions of this Chapter or any rules made thereunder for which no penalty is separately provided in this Chapter, shall be liable to a penalty which may extend to 216k[ten]216k thousand rupees]216a
Since you have not defaulted in making payment and filing of returns you can challenge the levy of penalty.
Because you rightly taken the registration as referred in seciton 77 but only failed to amend the same
Amendement is only procedural lapse
Please pray for waiving penalty quoting case laws wherein it decided for procedural lapse there cannot be any penalty