Penalty applicable for VCES

[Raju Kollavelil]

Our organisation has given application for registration under service tax on 21-12-2013 and taken registration on 23-12-2013. VCES filed on 31-12-2013 by paying full tax on 31-12-2013 for the period upto 31-12-2012. Subsequently tax and interest paid upto the period of Dec 2013.

The department issued a notice on 23-12-2013 for non registration and non payment of taxes.

Now the department demands to pay penalty under section 73(4A) for the period 1-1-2013 to 31-12-2013. My query is as per VCES 107(5) Notwithstanding any thing contained in sub section (3) and sub section (4), any service tax which becomes due or payable by the declarant for the month of January 2013 and subsequent months shall be paid by him in accordance with the provisions of the Chapter and accordingly, interest for delay in payment thereof, shall also be payable under the Chapter. My query is whether penalty has to be paid for the period.

AI Summary

Organization Faces Penalty Demand for Late Service Tax Registration; VCES Filing Disputed After Notice Issuance An organization applied for service tax registration on December 21, 2013, and received it two days later. They filed under the Voluntary Compliance Encouragement Scheme (VCES) on December 31, 2013, paying taxes for the period up to December 31, 2012, and subsequently paid taxes and interest for the period up to December 2013. However, the department issued a notice on December 23, 2013, for non-registration and non-payment of taxes and now demands a penalty for the period from January 1, 2013, to December 31, 2013. The respondent argues that the department's penalty demand is valid, as VCES cannot be filed after a show cause notice is issued.