Penalty for offences by director, etc., of company

See clause 93(G) of Finance Bill, 2013

A new section 78A is also being introduced to impose penalty on directors and officials of the company for specified offences in cases of willful actions.

Where a company has committed any of the following contraventions, namely:—

(a) evasion of service tax; or

(b) issuance of invoice, bill or, as the case may be, a challan without provision of taxable service in violation of the rules made under the provisions of this Chapter; or

(c) availment and utilisation of credit of taxes or duty without actual receipt of taxable service or excisable goods either fully or partially in violation of the rules made under the provisions of this Chapter; or

(d) failure to pay any amount collected as service tax to the credit of the Central Government beyond a period of six months from the date on which such payment becomes due,

then any director, manager, secretary or other officer of such company, who at the time of such contravention was in charge of, and was responsible to, the company for the conduct of business of such company and was knowingly concerned with such contravention, shall be liable to a penalty which may extend to one lakh rupees.

Penalty for directors' willful company contraventions: officers knowingly concerned face statutory personal penalties under new provision. Section 78A imposes personal penalty on any director, manager, secretary or other officer who, when the company committed certain service tax contraventions (evasion; issuing invoices without provision of taxable service; wrongful availment and utilisation of tax credit without receipt of service or goods; failure to pay collected service tax within six months), was in charge of and responsible for the conduct of the company's business and was knowingly concerned in the contravention.