Service Tax returns

Dear Sir/s,

I am registered to Service Tax (since Sept.09 2004) in Bangalore, Karnataka.

All my paperwork were handled by a CA, whom, I used to visit every month to fill up my TR-6 challan etc. and he would then have the documents remitted at the

respective departments/offices

The CA being very busy and handling all his clients alone with only a single assistant, was unable to keep pace. Early 2006, I felt he reduced paying attention to

my work and would give me excuses, that he was travelling and so on.

Upon realising that the paperwork was piling up, I took over from him, collected all my documents and met another CA who advised me it was not necessary to

collect ST henceforth, as my turnover in terms of services rendered (read billed), did not exceed Rs. 10 lakhs.

What both the CA's evidently did'nt inform me, was that, ST returns had to be filed religiously every half yearly.

A month ago, I received a letter from the ST dept. notifying me as to why I had stopped filing my returns and asking me to take necessary steps.

Upon discussing with the current CA, he mentioned that ST returns had to be filed religiously, failing which a penalty (approx. Rs. 4000/- per every return not

filed) would be applicable and there was no alternative to this.

However, upon searching the net for ST-Rules, I noticed that the penalty can be reduced or waived off altogether as given under Rule 7(C) (document attached)

[ Provided also that where the gross amount of service tax payable is nil, the Central Excise officer may, on being satisfied that there is sufficient reason for
not filing the return, reduce or waive the penalty.]21

I am at cross roads as to what should be my next step.
I strongly feel, I should meet the concerned officer at the ST department and seek for a reduction in Penalty.

Your immediate reponse would be of immense help.

Thank you
Regards

Attached File : 41 st rules.pdf downloaded: 142 times

Hi,

As regards, delayed filing of return is concerned, Rule 7C of the Service Tax Rules is relevant, which is reproduced below-

[(7C). Amount to be paid for delay in furnishing the prescribed return.-

Where the return prescribed under rule 7 is furnished after the date prescribed for submission of such return, the person liable to furnish the said return shall pay to the credit of the Central Government, for the period of delay of-

(i) fifteen days from the date prescribed for submission of such return, an amount of five hundred rupees;

(ii) beyond fifteen days but not later than thirty days from the date prescribed for submission of such return, an amount of one thousand rupees; and

(iii) beyond thirty days from the date prescribed for submission of such return an amount of one thousand rupees plus one hundred rupees for every day from the thirty first day till the date of furnishing the said return:

Provided that the total amount payable in terms of this rule, for delayed submission of return, shall not exceed the amount specified in section 70 of the Act:

Further Section 70 (1) states that the late fee shall be maximum Rs. 2000 per return.

However since you have mentioned that your turnover of taxable services was less Rs. 10 lacs & hence you were entitled to Small Service providers exemption, I would like to invite your attention to the Circular No. 97 / 8 /2007 dt. 23.08.2007 para 6.1 which is reproduced below -

The service tax return is required to be filed under Section 70 of the Act read with rule 7 of the Rules, by 'any person liable to pay the service tax'. This return is required to be filed on a half yearly basis, in Form ST-3. For the periods from April to September and October to March, it must be filed by the 25^th October and the 25^th April respectively. Further, ‘Input Service Distributor’ is also required to file this return. Persons who are not liable to pay service tax (because of an exemption including turnover based exemption), are not required to file ST-3 return.

In my opinion your case is likely to get covered by this provision whereby if your taxable service turnover is less than Rs. 10 Lacs you need not file the return.

You may refer the full circular at following link - https://www.servicetax.gov.in/circular/st-circular07/st_circ_97-2k7.htm

Lastly, if required the Assessee can always represent the case on his own.