See clause 93(F) of Finance Bill, 2013

The penalty under section 77(a) is being restricted to Rs. 10,000.

The provisions of erstwhile Section 77(a) read as under:

“(a) who is  liable to pay service tax, or required to take registration, fails to take registration in accordance with  the provisions of section 69 or rules made under this Chapter shall be liable to pay a penalty which may extend to ten thousand rupees or two hundred rupees for every day during which such failure continues, whichever is higher, starting with the first day after the due date, till the date of actual compliance.

Therefore as per the existing provisions the minimum penalty is Rs. 10,000/- whereas as per the proposed provisions the maximum penalty would be Rs. 10,000/- only for defaults in respect of seeking service tax registration.

Penalty cap for delayed service tax registration limited to a fixed maximum, removing daily rate exposure. The Finance Bill, 2013 (clause 93(F)) restricts the penalty for failure to take service tax registration to a fixed penalty cap of ten thousand rupees, replacing the prior regime that allowed either that lump sum or a continuing daily charge for each day of default and thereby removing the recurring daily rate exposure for registration defaults.