delay in filing service tax return

[Guest]

can one carry forward cenvat credit even if he fails to file service tax return in time?

[YAGAY andSUN]

Yes, you can.

[Mahir S]

Yes, but  Penalty may be imposed for late filing of Service Tax Return and such Penalty is required to be paid in cash only and can not be adjusted from the available cenvat credit balance.

[Vijay kumar]

Yes. There is no bar to carry forward the credit balance, even when a return is not filed in time. Such credit can be used for payment of tax also since availment of credit and tax payment are not linked to filing of return. However, delay in filing return attracts late fee in terms of Section 70 of the  Finance Act, 1994 read with Rule 7 of the Service Tax Rules, 1994 which can extend upto Rs.20,000/-. Secondly, Department can issue the notice within one year/five years from the date of filing the return, as the case may be. Regards - Vijay Kumar.

AI Summary

CENVAT Credit Can Be Carried Forward Despite Late Filing; Penalties Must Be Paid in Cash, Not via Credit. A query was raised about whether CENVAT credit can be carried forward if a service tax return is filed late. Three responses confirmed that carrying forward the credit is permissible despite late filing. However, penalties for late filing must be paid in cash and cannot be adjusted against the CENVAT credit. The penalties can reach up to Rs. 20,000, and the department may issue notices within one to five years from the return filing date. The responses emphasized that credit availment and tax payment are not dependent on timely return filing.