File Service Tax Return in time as Maximum Penalty increased

File Service Tax Return in time as Maximum Penalty increased to Rs. 20000

Under the existing scheme of law, Rule 7 of the Service tax Rules, 1994 read with its sub-rules deals with the provisions relating to the filing of service service tax return. Rule 7C Prescribe the Penalty which Assessee has to p ay if there is delay in filing of service Tax Return.

Produced here below the extract of Rule 7C, where the return prescribed under rule 7 is furnished after the date prescribed for submission of such return, the person liable to furnish the said return shall pay to the credit of the Central Government, for the period of delay of-

(i) fifteen days from the date prescribed for submission of such return, an amount of five hundred rupees;

(ii) beyond fifteen days but not later than thirty days from the date prescribed for submission of such return, an amount of one thousand rupees; and

(iii) Beyond thirty days from the date prescribed for submission of such return an amount of one thousand rupees plus one hundred rupees for every day from the thirty first day till the date of furnishing the said return:

Provided the total amount payable in terms of this rule shall not exceed the amount specified in Sec.70 of the Act. It is clear from the above that above penalty is subject to maximum specified in section 70. Section 70(1) Specify the maximum Penalty of Rs. 2,000/- in respect of return filed up to 31st March 2011. This amount of Maximum Penalty is been increased to Rs. 20,000/- (Twenty Thousand only) w.e.f. 01.04.2011.

As per Section 71 (C) of the Finance Act 2011 (8 of 2011) Applicable from 1st April Unless Otherwise specified there was an amendment in Sub Section (1) of section 70 which is as follows:-

‘In Section 70 (1) of the Finance Act, 1994, for the words “two thousand rupees”, the words “twenty thousand rupees” shall be substituted’. After considering the above amendment the Maximum Penalty for Late Filing of Service Tax Return, is been increased to 20000/- (Twenty Thousand) w.e.f. 01.04.2011 from earlier 2000/- (Two Thousand).

   After enactment of Finance Bill 2011, the following position will emerge out:

 ‘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’