Penalty for late filing of Service tax

[Mukund Honkan]

Dear Sirs, What was the due date for filing service tax returns for 6 months ended 30th Sept 2010 & for 6 months ended 31st March 2011. If returns are not yet filed, what will be the penalty amount . Kindly also let us have section reference.

Thanks

 

Mukund M Honkan

 

[ROHAN THAKKAR]

Dear Sir,

The due date for filing return for the period of April 2010 to September 2010 is 25th October, 2010 and for the period of October 2010 to March 2011 is 25th April 2011.

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,

Rohan Thakkar

9228720536

[NEERAJ KUMAR, RANCHI]

Mr Thakkar has very beautifully described the provisions, the only point where I would like to differ is the column

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]

 

In this situation I believe that the penalty amount will be Rs 20,000/- and no as said by Mr Thakkar.

AI Summary

Late filing penalty for service tax returns triggers prescribed staged fees and a statutory maximum cap; timely compliance advised. Late filing of service tax returns attracts graded late fees under Section 70 and Rule 7C: fixed amounts apply for initial delay intervals and a per-day charge applies for continued default, all subject to a statutory maximum. The maximum was increased effective from the law change, and penalties for returns spanning the amendment must be computed by applying pre-amendment charges for days before the change and post-amendment charges thereafter, aggregating amounts up to the statutory ceiling.