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of <h1>Service Tax Offences: Section 89 Penalties Include Up to 50% of Evaded Tax, CENVAT Credit, or 25% Unpaid Tax.</h1> The compounding amounts under the Service Tax Provision are determined by the Central Government based on the severity of the offence. For offences under section 89 (1)(a) of the Finance Act, 1994, the compounding amount is up to 50% of the evaded tax, with a minimum of 10%. For section 89 (1)(b), it is up to 50% of wrongly utilized CENVAT Credit, again with a 10% minimum. Section 89 (1)(c) offences incur a penalty of 50,000 for the first offence, increasing by 100% for each subsequent offence. Section 89 (1)(d) offences are penalized up to 25% of the unpaid service tax, with a minimum of 2% per month of delay.
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