Penalty on late filing of return

[Atul Gupta]

Hi Friends,

Please clarify whether maximum penalty of Rs. 20000/- on late filing of service tax returns applies to the returns filed for half year ended on 31.03.2011 or it will start to apply on the returns for the period 01.04.2011 to 30.09.2011?

Thanks  & Regards

[CA Rachit Agarwal]

Notification is respect of penalty for non-filing of return will be applicable from date of passing of notifications. In view of the above in our opinion it would become applicable for March 2011.

[ROHAN THAKKAR]

Dear Sir,

The penal provisions of late filing of service tax return are contained in Section 70 of the Finance Act and Rule 7C of the Service Tax Rules, 1994 which reads as under:

‘Every person liable to pay the service tax shall himself assess the tax due on the services provided by him and shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency and with such late fee not exceeding twenty thousand rupees rupees, for delayed furnishing of return, as may be prescribed.’

In addition, Rule 7C of the Finance Act states the amount to be paid if there is delay in submission of return. The amount to be paid is as under.

Period of delay	Amount to be paid
15 days	Rs 500
More than 15 days but upto 30 days	Rs 1,000
More than 30 days	Rs 1,000 + Rs 100 for every day till the default continues subject to maximum amount stated in section 70 [i.e., maximum amount to be paid is Rs 20,000]

 

The maximum penalty of Rs 20,000 which has been increased from Rs 2,000 will be applicable from 01-04-2011.

From the harmonious construction, the provisions for late filing of return can be summed up as under:

Return relates to April 2010 to September, 2010  whose due date is 25th October, 2010	If the return is to be filed on say 16th August, 2011. In such case, penalty will be Rs 15,800 [Rs 2,000 till 31-03-2011 plus Rs 100 for every day for 138 days from 01-04-2011]
Return relates to October 2010 to March, 2011  whose due date is 25th April, 2011	If the return is to be filed on say 16th August, 2011. In such case, penalty will be Rs 9,300 [Rs 1,000 till 25-05-2011 plus Rs 100 for every day for 83 days from 26-05-2011]

 

Hope, the above point has resolved the issue.

Regards,

CA Rohan Thakkar

+91 922 872 05 36

[YAGAY andSUN]

I do agree with the replies given by our experts.

AI Summary

Discussion Clarifies Rs. 20,000 Penalty Applicability for Late Service Tax Returns Under Section 70 and Rule 7C A forum discussion addressed the applicability of the maximum penalty of Rs. 20,000 for late filing of service tax returns. The query sought clarification on whether the penalty applied to returns for the half-year ending March 31, 2011, or from April 1, 2011, to September 30, 2011. Respondents explained that the penalty provisions, as per Section 70 of the Finance Act and Rule 7C of the Service Tax Rules, 1994, apply from April 1, 2011. They detailed the penalty structure based on the delay period, confirming the increased penalty applies to returns filed after this date.