penalty under service tax

[satbir singhwahi]

Audit party has detected service tax on Rent of immovable property . Service tax and interest at the rate of 15 p.a. has been deposited . Whether penalty will need to be deposited.

AI Summary

Unpaid Service Tax on Rented Property: Penalty Avoidable via Section 80 or Section 73(3) of Finance Act, 1994? An audit revealed unpaid service tax on rented immovable property, which was subsequently paid along with 15% interest. The query concerns whether a penalty is also required. One respondent noted that a 2012 notification allowed for no penalty if the tax was paid within six months due to court pendency, but since the audit detected the non-payment, a penalty might still be imposed unless Section 80 of the Finance Act, 1994 is invoked. Another respondent suggested using Section 73(3) provisions to avoid penalties by paying the tax and interest before a show cause notice is issued.