ACCOUNTING CODE FOR SERVICE TAX

[SANJEEV JADHAV]

We are the registered manufacturer under excise and we are getting man power services from various contractors. W.E. F 1.7.2012 we have to pay 75% Service tax on man power supply. Can you please explain accounting code for paying service tax relates to man power supply. Also please explain what will be interest for delayed payment of service tax. i.e 18% or 15%. Secondly we are paying service tax voluntariry before issue of notice from the department. Can we have to pay penalty?

[Surender Gupta]

General Rate of Interest as per section 75 is 18%. However, it will be 15% if turnover is not exceeding Rs. 60 lakhs.

You may select the accounting code while obtaining service tax registration number / filing service tax return as per the nature of your service. If your activity is not falling withing any one of specific category, you may choose residual category.

 

[YAGAY andSUN]

In some judgments the various Hon'ble Tribunal held that imposition of penalty in such matters is mandatory.  Futher, it will also depend on the gravity of the matter.

[dipsang vadhel]

You should use service specific accouning code while paying service tax for manpower service. for Accounting code of services , you may refer to Circular No.165/16/2012 –ST dt.  20th November, 2012. The spervice specific accounting code of manpower is  00440060.You should also get your service tax rgistration for manpower service or amend service tax registration amended to indclude Manpower service.

As regrds, rate of interest for delayed period,General Rate of Interest as per section 75 is 18%. However, it will be 15% if turnover is not exceeding Rs. 60 lakhs.

As per my opinion, Payment of Tax alongwith interest is compulsory. The imposition of penalty depends upon fact of the case. However, upon payment of Tax with interest before SCN, you may take up with department for non issuance of SCN if you have genuine reasons for non pament of tax.

 

 

AI Summary

Interest on delayed service tax payments attracts prescribed interest rates and penalty may follow depending on facts. Service Tax on Manpower Supply requires registered manufacturers obtaining contract manpower to account under the manpower service classification or use the residual category where no specific category applies; appropriate accounting code and registration amendment are necessary. Delayed payment attracts statutory interest at the prescribed rate, with a reduced rate available for smaller turnover, and payment of tax with interest before issuance of a show cause notice may affect penalty exposure, though penalty liability depends on case facts.