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PENALTY ON NIL RETUN FILING IN DELAY

rajesh (Accountant) (583 Points)

16 April 2011

DEAR SIR

AN ASSESSEE TAKEN ST REGISTRATION, AFTER REGISTRATION HE WAS NOT FILED ANY ST RETUN BECAUSE HE WAS NOT DOING ANY BUSINESS. SO HE WAS NOT COLLECT ANY ST , HIS ST RETUN IS NIL IN THIS CASE ASSESSEE IS LIABLE TO PAY PENALTY IF HE IS FILED HIS ST RETUN BY DELAY. ANY CASE LAWS IS AVAILABLE IF HE IS AVOID PENALY ON NIL RETUN FILED PLEASE TELL CASE LAWS OR ANY CIRCULAR. ITS URGENT

THANKS IN ADVANCE

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6 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 16 April 2011

Service tax Return:

Para 9.3 states that persons who are not liable to pay service tax because of exemption including threshold exemption are not required to file ST-3 returns on the reasoning that that an ‘assessee’ is defined as a person liable to pay service tax. Going by this reasoning, the service providers who are between Rs 7 and 8 lakhs also need not file any ST-3 returns though they have obtained a registration. It would be of great help to such service providers who have obtained a registration but are within the threshold exemption, if CBEC clarifies explicitly that they do not have to file any ST-3 Returns. Board had In F.No. 137/58/2007-CX.4 dated 29.3.2007 clarified as follows:-

it has been stated that a large number of show cause notices are pending adjudications that have been issued for non-filing of ST-3 returns. It has also been pointed out that many of these cases pertain to ST registrants, whose annual turnover fall under the exempted limit of Rs. 4 lacs p.a (now raised to Rs. 8 lacs p.a). The issue requiring resolution is whether such notices can be dropped to reduce the pendency of adjudication.

02. The issue has been examined. The service tax return is required to be filled under Section 70 of the FA, 1994 by 'Every person liable to pay the service tax'. Similarly, as per Rule 7 of the ST Rules, 1994, 'Every assessee' is required to submit service tax return. By definition, an 'assessee' is a person liable to pay service tax. Thus, it can be concluded that for persons, who are not liable to pay service tax (because of the exemption) are also not required to file ST-3 returns. Pending show cause notices may be disposed of taking into consideration the view as above.

The Circular needs to clarify this issue more emphatically.

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(Guest)

2005-ITS-CESTAT--1358-M/s B & A MULTIWALL PACKAGING LTD-Vs-COMMISSIONER OF CENTRAL EXCISE, BBSR-I-Date of decision : 25.04.2005
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Penalty cannot be imposed for non-filing of return when there was no service tax liability.

priti (Article) (21 Points)
Replied 26 June 2012

is there any provision to surrendered Service tax registration certificate mandatory if we are not filling nil return in case we are within exemption limit...

K.chandrasekaran (Partner) (210 Points)
Replied 19 July 2012

unless there is deliberate noncompliance evasion etc nopeanlty should be leviable.

Many business persons are still notgetiing enough infrasruture todo business and there are many valid reasons for delay etc.

Additinal nominal fee only can be collected for any noncompliance.

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 19 July 2012

General penalty of Rs 10,000/- will be imposed if there are no valid reasons for delay in filing the return.

Linh Le Thuy (no) (22 Points)
Replied 19 July 2012

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