Service Tax on providing gardening service includes maintaining garden

[RAMESH MANSHARAMANI]

one of my client providing gardening service which includes maintaining garden of company as well as alloted road by govt., providing flowers pots on rent at office as well as chairman house, regular moving of lawns, procuring and trimming of shrubs and clearing of garden as well as also depute their employees on daily wages at respective garden places during govt. audit at said govt. undertaking, concerned officer direcly reported to service tax dept., and said dept. issued notice as well as summon to my client to pay service tax with penalty & interest on payable service tax while my client has neither collected nor raised service tax amount in its bill but under contract there is a condition mentioned that quoated rate is excludes service tax if applicable. my client has not obtained service tax registration since said activities commenced. now i need your guidence how to deal with said issue with service tax dept., ca ramesh k m [email protected]

[Surender Gupta]

From the facts stated above, it is clear that it was within the knowledge of the assessee that service tax is appliable on the impugned activity but he failed to obtained the service tax number and collect the service tax from the client and therefore did not deposit. Now, he has no option but to deposit the service tax alongwith interest to the service tax department. For the issue of penalty he may choose to fight the matter and opt for litigation. Alternatively he may choose to deposit the amount of penalty accordingly after ascertaining all the relevant aspects. Where extended period of limitation is invokable, he may chose to pay penalty upto 25% of the service tax amount before expiry of 30 days from the order in original passed by the first adjudication authority.

AI Summary

Service tax liability on gardening services requires registration and payment; unpaid tax should be deposited with interest while penalties may be contested.
Service tax liability applies to gardening services including maintenance, lawn care, plant rental and deployment of daily wage staff, creating obligations to register, collect where applicable and remit tax; failure to do so leads to assessment of tax with interest and possible penalties, though deposit of tax and interest is the pragmatic compliance step while penalty may be contested or mitigated by a prescribed pre adjudication or post adjudication voluntary payment under extended limitation rules.