TaxTMI 
TaxTMI 
TaxTMI 
Amendments made by Finance Bill, 2015 (w.e.f. enactment date)
Finance Bill, 2015 has made the following two changes in the provision of section 73 -
- New sub-section (1A) enabling recovery of self assessed and returned u/s 70 Service Tax payable but not so paid, as per section 87 of the Finance Act, 1994; and
- Omission of sub-section (4A) which provided for non-issuance of Show Cause Notice (SCN) where true and complete details of non-payment / short payment of Service Tax / erroneously refund is available in specified records and pays Service Tax along with interest and 25 percent of penalty and informs about the same to Central Excise Officer in writing.
Thus, with effect from a notified date, the amendment seeks to amend section 73 of 1994 Act so as to -
- insert a new sub-section (1B) to provide that the recovery may be made under section 87 of the self-assessed service tax, declared in the return but not paid, without service of any notice under sub-section (1), and
- omit sub-section (4A).
As a consequence, Rule 6 (6A) which provided for recovery of service tax self-assessed and declared in the return under section 87 has been omitted consequent to the amendment in section 73 for enabling such recovery. This change will come into effect from the date of enactment of the Finance Bill, 2015
In terms of new sub-section (1B) of section 73 and omission of Rule 6(6A), the following impact would be there -
- Sub-section (1A) shall over ride sub-section (1) of section 73.
- Sub-section (1B) shall be applicable only when Service Tax in payable based upon self assessment / return filed by the assessee, i.e., return filed but tax not paid.
- Such Service Tax payable may be full or in part.
- Recovery of Service Tax payable shall be made alongwith interest (not penalty), if any.
- Recovery mode may be any of the prescribed modes in terms of section 87 of the Finance Act, 1994.
- In such a case, there will be no requirement to serve notice as per sub-section (1) of section 73.
- The modes of recovery shall be as per section 87 only
- Provision of concessional penalty as per sub-section (4A) shall no longer be applicable.
It may also noted that penalties under section 76 and 78 of the Finance Act, 1994 have been substantially reduced / rationalized by Finance Bill, 2015.