Penalty U/s 76 & 77

[Saurabh Singh]

Dear Team

 

One of my  client had made default in submission of his service tax return .. I mean he submitted the return late by approx 6 to 8 months .. and his service tax liability was rs. 5.5. lacs which he has paid with interest now i want to know what was the penalty which he should pay ..

[YAGAY andSUN]

Penalty under Section 76 ( Failure to make payment of service tax within time - Section 68) W.e.f. 08.04.2011 Rs. 100/- per day or 1% of the tax per month, whichever is higher subject to maximum of 50% of tax amount that assessee has failed to pay.

Under Section 77 the maximum penalty amount can go upto Rs. 10000/- (w.e.f 08-04-2011)

Since your client has filed return late (more than of 30 days) - In this scenario you will be liable to pay the maximum penalty of Rs. 20000/-

 

[YAGAY andSUN]

Futher, Since your client has deposited the service tax alongwith interest therefore, you can make request to the Department that do not issue any show cause notice ( if already not been issued upon your client) and do not impose penalty upon your client.

AI Summary

Late service tax penalty includes higher of daily or monthly charge with capped penalty; pay interest and seek waiver request. Late payment of service tax falls under Section 76 (w.e.f. 08.04.2011) allowing penalty calculated as either a fixed daily amount or a monthly percentage of unpaid tax, subject to an overall cap, while Section 77 prescribes a separate maximum penalty; where tax plus interest has been deposited the department can be requested not to issue a show cause notice or to refrain from imposing penalty.