Service Tax

Please any one help regarding this

01. Whether it is a propritary/parnership OR LTD., /PVT. LTD ?

02.  What Service ?

03.  Interest rate is 13%

Pay service tax along with interest and file ST3 return for past period.  And hope for the best.

Thanks for the replay

It is a Propratership firm and they are into building contract

By building contract you mean commercial construction?  If so, it is effect from 10/09/2004 onwards.  Being propritary concern they should have paid tax every quarter.  One has to arrive at the tax payable every quarter for e.g. Oct. 04 to Dec. 04 - due date 05/01/2005 .  Let us assume the tax payable is Rs.10,000/- Date of payment: 21/08/2008.  Interest @ 13% works out to be Rs.4716/- If paid on 21/08/2008.

What will be the penalty for the late payment?

Interest Payable

                          Notified rate of interest under section 75

Notification No. 26/2004-ST, dated 10-9-2004

Interest under section 75 can be charged for the actual period of delay only. So, where the delay in payment of service tax is for part of month only, then the interest under section 75 can be charged for period of actual days alone and not for the full month. The liability to pay interest at rates prescribed under section 75 is mandatory, as provision of law did not confer any discretion in matter of levying interest.

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 Circular No. 97/8/2007-ST, dated 23-8-2007

Delay in payment of service tax, including a part thereof, attracts simple interest in terms of section 75 of the Act. The rate of interest is as prescribed from time to time, in accordance with this section. At present, the rate of interest is 13% per annum (Notification No. 26/2004-ST, dated 10-9-2004). Further, failure to pay service tax also attracts a penalty under section 76 of the Act, which shall not be less than Rs. 200 for every day during which such failure continues or at the rate of 2% of such tax per month, whichever is higher, starting with the first day after the due date till the date of actual payment of the outstanding amount of service tax. However, such penalty would not exceed the service tax payable.

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As per section 80, it has been provided that notwithstanding anything contained in the provisions of section 76, section 77 or section 78, no penalty shall be imposable on the assessee for any failure referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure.

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No penalty if tax is paid before issue of show cause notice

In a number of cases a view is taken by the Tribunal and even the Supreme Court that No penalty shall be leviable if tax is paid before issue of show cause notice.

Dear Sir,

Can you please provide a copy of judgement for No penalty if tax is paid before issue of show cause notice