PENALTY FOR NOT FILING NIL RETURN

[SUMEDH AYARE]

IS THERE ANY PENALTY/INTEREST FOR NON FILING OF NIL SERVICE TAX RETURN FROM LAST 3 YEARS. 

[YAGAY andSUN]

Yes, Penalty will be leviable for not filing of return. From 08-04-2011, the maximum penalty shall not exceed Rs. 20,000/-.

[Vijay kumar]

There is no interest (since tax is NIL), but penalty is prescribed for delay in filing of ST-3 return in terms of Section 70 of the Finance Act, 1994 read with Rule 7C of STR, which can extend upto Rs.20,000/- per return. However,  in terms of 3rd proviso to Rule 7C of the Service Tax Rules, 1994 "Provided also that where the gross amount of service tax payable is nil, the Central Excise officer may, on being satisfied that there is sufficient reason for not filing the return, reduce or waive the penalty." Thus, you may file the returns and apply to Supdt. of Service Tax for waiver of penalty.

[JAMES PG]

As per  proviso to Rule 7 C of ST Rules, the Supdt can waive penalty on being satisfied that there is sufficient reason for not filing the Nil Return. Hence while applying for waiver of penalty the reasons which warranted non-filing of the Return needs to be emphasised. It is subject to the satisfaction and discretion of the Supdt.

[rishi mohan]

Section 77 charges penalty on non-filing of returns maximum up to Rs. 20,000/-. This applies towards nill returns as well.

AI Summary

Penalty for not filing nil service tax returns may be imposed; waivers available if sufficient reason is shown. Penalty is leviable for failure to file service tax returns even when the tax payable is nil. No interest accrues for nil tax, but statutory penalties for delayed or non filing apply. A supervisory officer may reduce or waive penalty if satisfied there is sufficient reason for non filing; filing outstanding nil returns and applying for waiver is therefore recommended. The statutory scheme imposes an upper cap on the penalty and treats nil returns as subject to the same filing obligations and potential sanctions as other returns.