TaxTMI 
TaxTMI 
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.
penalty under service tax
19 Jun 2014 
2 Replies 
2336 Views Asked by
Penalty for service tax on rent may be avoided if tax and interest are paid before show cause notice.
Audit found unpaid service tax on rent; taxpayer paid tax and interest and asked about penalty. Relief avenues include a limited waiver scheme for matters pending in courts permitting deposit without penalty, a general finance act penalty relief provision, and a pre notice remedy where payment of tax and interest before a show cause notice and intimation to the officer can prevent penalty, as supported by tribunal authority. Absent timely use of these mechanisms, the department may impose penalty. (AI Summary)
Audit found unpaid service tax on rent; taxpayer paid tax and interest and asked about penalty. Relief avenues include a limited waiver scheme for matters pending in courts permitting deposit without penalty, a general finance act penalty relief provision, and a pre notice remedy where payment of tax and interest before a show cause notice and intimation to the officer can prevent penalty, as supported by tribunal authority. Absent timely use of these mechanisms, the department may impose penalty. (AI Summary)