Section - 073A - Service Tax Collected from any person to be deposited with Central Government

Yes. In the case of Modern Co-Op. Bank Ltd. [2009 (10) TMI 278 - CESTAT, MUMBAI] , it was held that the appellant has collected the service tax from the customers and considering that the case is covered under the exemption limit, did not deposit the same with the revenue, which is a grave error on the part of the appellant and the same cannot be ignored. 

This Tribunal has also held in the case of Pandurang Travels [2009 (4) TMI 123 - CESTAT, MUMBAI] that although the appellant's turnover is below the taxable limits but in case the appellant has collected the service tax from their customers in that case the appellant has to deposit the same within the prescribed time to the Department and in case of any failure it is to be considered as a grave offence and the appellant was held liable for penal action for equivalent amount of penalty. Following the same, I am of the considered opinion that in this case also the appellant collected the service tax from their customers and failed to deposit the same within the time with the department and also not filed the Service Tax Return which are in contravention of the provisions of the Finance Act. For that the appellant is liable for penal action.

Deposit of collected service tax must be remitted even if small provider exempt; penalties apply for non-deposit. Section 73A requires that service tax collected from customers be deposited with the Central Government even if the collector avails the small service provider exemption; tribunals have held that collection triggers an obligatory deposit and failure to deposit and to file returns attracts penal action and enforcement for non-compliance.