Section 89 - Offences and penalties

Service tax offences: evasion, false records or wrongful credit use attract enhanced imprisonment and require prior sanction for prosecution.

Section 89 criminalises knowingly evading service tax; availing or utilising credit without actual receipt of taxable service or excisable goods; maintaining false books or supplying false information; and collecting service tax but failing to pay it to the Central Government beyond six months. Specified offences carry imprisonment up to three years and, for failure to pay collected tax where threshold is exceeded, up to seven years, with a minimum six month term unless special and adequate reasons are recorded. Repeat offences attract higher maximum terms and prosecution requires previous sanction of the Chief Commissioner.