Please help..........

nice question.. i will revert back you soon

Dear Richa Date for registration should be 30 days from the date of receipt of service or date of payment of service. Secondly penalty will be higher of 2: 10000 or Rs. 200 for every day during which such failure continue. I hope my answer is clear to you.

@ Manoj Mehta

Sir, the provision of registration says that one should apply for registration within 30 days of levy of service tax or within 30 days of commencement of business of providing such service. In this case, the company liable to pay service tax is not proving service but is receiving service of GTA. So, will the general provision which in its literal sense apply to the provider of services will also apply to the receipient?

If there is any other provision, kindly let me know.

Also, is the penalty amount mentioned by you is according to section 77 ?

Actually, the company had paid penalty of Rs, 6250/- i.e. 1/4th of the tax amount as per section 73(4A) which was demanded from them and it was assured that there will be no more notices. But, now the AC is demanding the penalties under Sec. 77 & 78. So, whether the amount of penalty paid earlier was not payable?

Please guide me.

Dear Richa Firstly registration time will remain same for service receiver, so 30days will apply in this case. Secondly penaly of 10000 should arise in this case but as you told your case is different where they have already taken penalty amount and againing demanding the same. I reffered the same to my few fellow CAs. One of them suggested to pay the balance amount (I.e 10000- 6250) but Richa give me one day time so that I can talk more on the same with more experienced person of the industry. Soon I will send a pm to you on the same.

@ Manoj Mehta

Thank You Sir.

Dear Richa,

For your query regarding registration:

As per section 69 read with rule 4 of Service tax rules, person liable to pay tax, in our case the company in capacity of a service recipient, shall register within 30 days from the date from which the service tax under section 66B is levied. This implies that 30 days shall be counted from the date from which a particular service has been made/ declared taxable and not from the date when a service receiver becomes liable to pay tax. Therefore, the company should have had ST registration from the 1st day of receiving the said GTA service.

Since the company obtained registration in July, penalty upto Rs. 10,000 u/s 77 (for failure to timely obtain registration) can be levied by the department. Further, penalty under this section is different from that leviable u/s 73 since both the penalties are imposed on account of different reasons. Hence, penalty u/s 77 can be demanded.

Hope this satisfies you.

Dear Richa,

By harmonous interpretation of Rule 4 of STR, 1994 read with section 69(1) and charging section 66B along with section 68, a recipient of GTA Service shall be required to take registration no. within 30 days after it became 'liable' to pay service tax. As per Rule 7 of POT Rules, 2012, in case of RCM, the liability of service tax arises on the date of payment to service provider. So, in your case, you should had made the application in ST-1 within 30 days of 1st payment of freight to the GTA. 

Regarding penalty for default in payment of tax, you were not required to pay penalty u/s 73(3) if you made the payment before issue of SCN. Only Interest u/s 75 was required to be paid.

Moreover, it seems that the goods being transported is 'foodstuff' and so no service tax need to be paid by the company as it is exempted.

Kinldy mail for further clarifications.

@ Rashmi

Thank You Rashmi

@ Manoj Agarwal Thank You Sir.

Sir, what is the rate of interest under reverse charge (u/s 75) - 18% or 15% ?