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Payment of service tax

Girish (Consultant) (94 Points)

31 March 2012

Hi,

One of our client(individual) who has started business of providing website development & other allied services in April 2011, has also obtained service tax registration with his firm name (for the purpose of address proof & providing id proof in the name of firm to open a current account).

During the year he has provided services of Rs. 5,00,000/- (approx.). Kindly give me an idea whether he has to pay the service tax for the mistake that he has obtained the registration / could he just file NIL returns till he crosses the basic exemption limit??

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5 Replies

Rahul Sharma (Practicing Chartered Accountant) (131 Points)
Replied 01 April 2012

Yes, he can file a NIL return till he crosses threshold exemption limit of Rs.10,00,000/-

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Girish (Consultant) (94 Points)
Replied 02 April 2012

Wont there be any complications in future???

Abhishek Sharma (CA Final) (78 Points)
Replied 02 April 2012

Hii Girish..

As it is known that the liability to take service tax registration starts as and when your value of taxable services provided crosses 9.0 lacs but before 10.0 lacs. And liability to pay service tax starts as and when it crosses 10.0 lcs. In the situation cited by you, ur client can file NIL return in ST-3 form. But if the possibility of crossing the limit of 10.0 lacs is not likely in the long run, den u may go for surrender of registration.

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Girish (Consultant) (94 Points)
Replied 02 April 2012

Hi Abhishek,

Thanks for the reply....!!! It was of great help...!!!

Rahul Sharma (Practicing Chartered Accountant) (131 Points)
Replied 02 April 2012

Penalty is applicable for late filling of Return is as under:

From 1to 15days = Rs.500/-

From 16 to 30 days = Rs.1000/-

After 30days Rs.100/- per day till the date when return is being filed.

Subject to maximum of Rs.20,000/-

In case of NIL return, Penalty can be waived at the option of department, if valid reason is produced for late filing of return.

This is the maximum that can happen.

You can file online return at present without paying penalty & in future if you receive any demand from department, you try and covence them as to why you have filed the return late.

2 Like