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Penalty for not received service tax invoice from service provider

Balendra Parmar (Finance Manager) (199 Points)

17 May 2012

Dear Sir,

We have received the services from labour contract for handling Machines in our organization. The service provider not issued service tax invoice .The commisioner impose penulty with service tax and interest . This is not our defult for not getting service tax invoice.The commissioner said that the same responsibility as service provider.So, service provider and receiver both are in defult ? The contention of department is correct ?

Regards,

Balendra Parmar.

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9 Replies

Makk P (Finance Officer) (126 Points)
Replied 17 May 2012

The contention of the department is not correct as the default is done by the service provider and penalty of default can not impose on us. It is not within the power of the department to fine service recipient for non charging of service tax by the service provider in his invoice. There are many settled cases on this issue.

Prateek Agarwal (Sr. Executive - Finance & Accounts) (1732 Points)
Replied 17 May 2012

Service tax Invoice is not necessary.

If in the invoice it is separately mentioned the amount of service tax and value of taxable service, then it will suffice.

Even that is not complied, then its a default.

Prasad (Sr. Manager) (617 Points)
Replied 17 May 2012

Agree with Makk, but under which section have you been served notice to pay service tax and penalty

RAVITOSH KUMAR (Executive) (324 Points)
Replied 17 May 2012

please read the notice served on you and find on what basis you are being penalised because there is no default on your part provided you have not taken any credit of Service Tax on such services as invoice is not available

CA Ganesh Karthik (Chartered Accountant) (368 Points)
Replied 18 May 2012

You might have been issued the notice if you have taken CENVAT Credit for the service.

CENVAT Credit can be taken only on the basis of an Invoice. Hence if you had taken the CENVAT credit without actually having the invoice, that will not be proper. I guess its for this reason the Department has issued you the notice.

Pls read the basis for demand..

Ramanuj (Accountant.) (834 Points)
Replied 18 May 2012

AGREE WITH ABOVE

TRILOCHAN (SENIOR ACCOUNTANT) (698 Points)
Replied 18 May 2012

I think the service provider has not registerd with Service Tax,

Therefore the Service Tax officer imposes Service Tax + interest thereon as per Servcice Tax Notification No.15 dated 17.03.2012.

TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

Government of India

Ministry of Finance

(Department of Revenue)

New Delhi, the 17^th March 2012

Notification No.15/2012-Service Tax

GSR. (E).—In exercise of the powers conferred by sub-section (2) of section 68 of the Finance Act, 1994 (32 of 1994), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 36/2004-Service Tax, dated the 31^st December, 2004, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R 849 (E), dated the 31^st December, 2004, except as respects things done or omitted to be done before such supersession, the Central Government hereby notifies the following taxable services and the extent of service tax payable thereon by the person liable to pay service tax for the purposes of the said sub-section, namely:—

I. The taxable services,—

(A) (i) provided or agreed to be provided by an insurance agent to any person carrying on the insurance business;

(ii) provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road, where the consignor or the consignee is,—

(a) any factory registered under or governed by the Factories Act, 1948 (63 of 1948);

(b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force in any part of India;

(d) any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder;

(e) any body corporate established, by or under any law; or

(f) any partnership firm whether registered or not under any law including association of persons;

(iii) provided or agreed to be provided by way of sponsorship, to anybody corporate or partnership firm located in the taxable territory;

(iv) provided or agreed to be provided by an arbitral tribunal or an individual advocate or the support service provided or agreed to be provided by Government or local authority, to any business entity located in the taxable territory;

(v) provided or agreed to be provided by way of renting or hiring any motor vehicle designed to carry passenger or supply of manpower for any purpose or works contract by any individual, Hindu Undivided Family or proprietary firm or partnership firm, whether registered or not, including association of persons; located in the taxable territory to any company formed or registered under the Companies Act, 1956 (1 of 1956) or a business entity registered as body corporate located in the taxable territory;

(B) in relation to any taxable service provided or agreed to be provided by any person who is located in a non-taxable territory and received by any person located in the taxable territory;

(II) the extent of service tax payable by the person who receives the service and the person who provides the service for the taxable services specified in (I) shall be as specified in the following Table, namely:-

Table

Sl.No.	Descripttion of a service	Percentage of service tax payable by the person providing service	Percentage of service tax payable by the person receiving the service
1	in respect of services provided or agreed to be provided by an insurance agent to any person carrying on insurance business	Nil	100%
2	in respect of services provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road	Nil	100%
3	in respect of services provided or agreed to be provided by way of sponsorship	Nil	100%
4	in respect of services provided or agreed to be provided by an arbitral tribunal	Nil	100%
5	in respect of services provided or agreed to be provided by individual advocate	Nil	100%
6	in respect of services provided or agreed to be provided by way of support service by Government or local authority	Nil	100%
7	(a) in respect of services provided or agreed to be provided by way of renting or hiring any motor vehicle designed to carry passenger on abated value. (b) in respect of services provided or agreed to be provided by way of renting or hiring any motor vehicle designed to carry passenger on non abated value.	Nil 60%	100 % 40%
8.	in respect of services provided or agreed to be provided by way of supply of manpower for any purpose	25%	75 %
9.	in respect of services provided or agreed to be provided by way of works contract	50%	50%
10	in respect of any taxable services provided or agreed to be provided by any person who is located in a non-taxable territory and received by any person located in the taxable territory	Nil	100%

2. Person who pays or is liable to pay freight either himself or through his agent for the transportation of goods by road in goods carriage, located in the taxable territory shall be treated as the person who receives the service for the purpose of this notification.

3. This notification shall come into force from the date on which section 66B of the Finance Act, 1994 comes into effect.

[F.No. 334/1/2012- TRU]

(Samar Nanda)

Under Secretary to the Government of India

CA Ganesh Karthik (Chartered Accountant) (368 Points)
Replied 18 May 2012

Dear Trilochan, T

This notification has not yet come into effect.. So, this has no impact as on date..

Ravi Khandelwal (Chartered Accountant) (24 Points)
Replied 19 May 2012

Department can not penalize directly to service receiver but service receiver has to taken care at the time of payment service tax that he has received the proper invoice.........and it is more crucial when they are taking cenvat credit..........