Service Tax — Payment by cheque — Delay in encashment beyond due date — No interest/penalty charged

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....bai Directorate of Service Tax The Rule 7 of the Central Government Account (Receipts and Payments) Rules, 1983 inter alia provides that Government dues including taxes can be credited by the taxpayers directly into any branch of an authorised Bank. As per Rule 79 of the Treasury Rules of the Central Government, such payments/credits can be made by cheques also. Accordingly, a large number of t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t has been levying interest and penalty. This practice has developed presumably because the Rule 79(1)(a) of the Treasury Rules inter alia states that "------, until the cheque is cleared, the Government cannot admit that payment has been received; ---------" 4. A number of representations have been received in this Directorate stating that recovery of interest and imposition of penalty in the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....MAN 378 (GOI)]. The Government has held that a harmonious reading of the provisions of Rule 7 of the Central Government Account (Receipts and Payment) Rules and Rules 79 & 80 of the Treasury Rules, makes it clear that the Government dues can be presented in the form of cheque into the authorized Bank. And if the cheque is not dishonored later, the payment shall be deemed to have been made on the d....