Service Tax Notice

Kindly give your valuable opinion in following case

Mr. A is engaged in providing service of lifting, loading & unloading. He has been in this business since last many years. Value of service provided by him in past years as well as in current year also exceeds threshold limit.

However he has not obtained any service tax registration.

Now he has received notice from service tax department asking for details about service tax registration, audit report, accounts etc.

1. At this point of time, what should be done? What is the best alternative available to him?

2. Whether he is liable to pay amount of service tax from his pocket for past years also (He has not collected any amount for service tax)?

3. What are possible consequences like interest, penalty?

Also suggest best possible solution for such assessee who have not received any notice from service tax department but want to take new registration.

1. Whether they should approach a fresh or

2. It should be taken retrospectively

Thanks in advance

Regards

Ravindra Manek

Dear Ravindra,

The answer for your question lies in Section 77.

Any person who is liable to pay service tax, or required to take registration, fails to take registration in accordance with the provisions of section 69 or rules made under this Chapter shall be liable to pay a penalty which may extend to five thousand rupees or two hundred rupees for every day during which such failure continues, whichever is higher, starting with the first day after the due date, till the date of actual compliance;

At this point of time, a fresh registration must be taken.

However, in the penal provisions, it is no where specified that the assess will have to pay service tax for the days of default.

Hence, nothing has to be paid in respect of Service tax for the gross value received during the period prior to registration.