RE: [aurangabad_ca] DELAY IN PAYMENT OF SERVICE TAX
Good Summary Parthiv...
Thanks for sharing..
Regards
Shailesh Rathi
-----Original Message-----
From: aurangabad_ca@
On Behalf Of Parthiv Mehta
Sent: Wednesday, December 30, 2009 10:45 AM
To: aurangabad_ca
Subject: [aurangabad_
DELAY IN PAYMENT OF SERVICE TAX
By: Mr. M. GOVINDARAJAN :
Sec. 68 of the Finance Act, 1994 imposes on obligation on the persons
liable to pay service tax to pay the service tax to the credit of the
Central Government. Rule 6 of Service tax Rules, 1994 provides the
periodicity of the payment of service tax on monthly basis or
quarterly basis. If the payable service tax is able to compute at the
time of payment the rule provides for the provisional payment.
Service tax is paid to the credit of Central Government in time. There
shall be no lapse on the part of the persons liable to pay service
tax, to pay service tax in time.
Delay in payment of service tax would attract the payment of interest.
Sec. 75 of the Finance Act, 1994 provides that every person, liable to
pay the tax in accordance with the provisions of Sec. 68 or the rules
made there under, who fails to credit the tax or any part thereof to
the account of the Central Government within the period prescribed,
shall pay interest at such rate not below ten per cent and not
exceeding thirty six per cent per annum, as is for the time being
fixed by the Central Government, by notification in the Official
Gazette for the period by which such crediting of the tax or any part
there of is delayed. Payment of interest in delayed payment of service
tax is mandatory. There shall be no waiver of paying interest for
delay in payment of service tax.
Sec. 78 of the Finance Act, 1994 provides penalty for failure to pay
service tax. It provides that any person, liable to pay service tax in
accordance with the provisions of Sec. 68 or the rules made there
under who fails to pay such tax, shall pay, in addition to such tax
and the interest on that tax amount in accordance with the provisions
of Sec.75, a penalty which shall not be less than two hundred rupees
for every day during which such failure continues or at the rate of
two per cent of such tax, per month, which ever is higher, starting
with the first day after the due date till the date of actual payment
of the outstanding amount of service tax. The total amount of the
penalty payable however shall not exceed the service tax payable.
Sec. 80 provides that no penalty shall be imposable on the assessee
for any failure to pay service tax if the assessee proves that there
was reasonable cause for the said failure.
The following are the case laws discussing the impact on delay in
payment of service tax:
1. Handiman Services Limited V. Commissioner of Service Tax, Bangalore
- 2008 (12) STR 765 (Tri. Bang)
The Original Authority had given a clear finding accepting the
reasonable grounds made out by the assessee for not paying the tax in
time. However they paid the tax before the issue of show cause notice
under the Amnesty Scheme. The appellant contended that the imposition
of penalty by the Revisionary Authority is not justified. The tribunal
held that once the Original Authority has examined the reasonable
grounds and found not fit for imposing penalty, then the same cannot
be raised by the Commissioner.
2. Commissioner of Central Excise, Delhi V. Brill Education (India)
Private Limited - 2008 (12) STR 759 (Tri. Del)
The respondents are engaged in business/profession of commercial
training and coaching centre. A show cause notice was issued proposed
demand of tax and penalty along with interest. The respondent
deposited part amount of tax prior to the issue of show cause notice
and also deposited the balance amount along with the interest after
the issue of show cause notice. The Adjudicating Authority confirmed
the demand of tax and also imposed penalty. A show cause notice was
issued later under Sec. 84 for reviewing the Adjudication order. The
Commissioner of Central Excise by the impugned order dropped the
proceedings initiated under show cause notice. Hence the Revenue
filed this appeal.
The tribunal found that the respondents declared the entire value of
taxable service in their service tax returns. The Commissioner
(Appeals) dropped the proceedings following the clarification issued
by CBEC vide Circular F.No. 137/167/06-CX-
it has been clarified that once the due service tax in full along with
interest accrued on delayed payment is voluntarily deposited by the
tax payer before issuance of show cause notice the entire proceedings
are deemed to have been concluded. The tribunal did not find no
infirmity in the order of the Commissioner (Appeals) and rejected the
appeal of the Department.
3. Commissioner of Central Excise, Mangalore V. V.S. Patil - 2008 (12)
STR 567 (Tri. Bang)
The respondent provided rent-a-cab service to BSNL for the period from
1.4.2001 to 31.3.204. He failed to pay the service tax on the above
amount. The Revenue proceeded against him and issued a show cause
notice demanding service tax. The respondent paid the service tax with
interest before issuance of show cause notice. The Assistant
Commissioner confirmed the demand above with interest. Penalty was
also imposed. The Commissioner (Appeals) waived the penalties on the
ground that there was no malafide intention to evade service tax. The
Revenue filed this appeal aggrieved against the order of the
Commissioner (Appeals).
The Revenue contended that there was deliberate suppression with
intent to evade service tax liability. The service provider registered
with the department as early as on 10.9.2003 and paid the service tax
on 10.9.2003 for the period from April 2001 to July 2002. The period
covered in this case is in continuation of the above mentioned period.
Therefore, there is no reason for him to discontinue the payment of
service tax.
The tribunal held that there is substance in the Revenue's contention.
The tribunal ordered the payment of penalty limiting to 25% of service
tax to meet the ends of the justice.
4. Akbar Travels India (P) Limited V. Commissioner of Service Tax,
Bangalore - 2008 (12) STR 487 (Tri. Bang)
The appellant submitted that-
"< There was no intention to evade duty as the appellants were under
the impression that the service tax was paid by the sub agents;
"< As the same has not paid and it was brought to their notice they
took steps to deposit service tax along with interest;
"< In view of the above the Commissioner was justified in dropping the
penalty under Sec. 76 and imposing lesser penalty under Sec. 78;
"< The Revisional Authority was not justified in enhancing the penalty.
The tribunal held that the original authority exercised his powers
under Sec. 80 reasonably as bona fide action seen in belated deposit
of tax and allowed the appeal.
5. FIITJEE Ltd., V. Commissioner of Central Excise, Jaipur - 2008
(12)STR 306 (Tri. Del)
The appellant paid the tax and filed the return and therefore the
allegation of suppression of facts with intent to evade duty is not
sustainable and Sec. 78 of the Finance Act cannot be invoked. The
appellant is liable to pay differential tax and it was paid later.
Therefore the imposition of penalty under Sec. 76 is justified.
6. Ganesh Automobiles V. Commissioner of Central Excise, Jaipur - II -
2008 (12) STR 307 (Tri. Del)
The appellant paid the tax before the issue of show cause notice but
they have not paid the interest along with the tax. Thus it is a clear
case to pay the tax. Accordingly, the imposition of penalty under Sec.
76 and Sec. 77 of the Finance Act is upheld.
7. Jagdeep Singh Saluja V. Commissioner of Central Excise, Bhopal -
2008 (12) STR 309 (Tri. Del)
The appellant is a proprietorship firm and covered by the Board
Circular No. B11/1/2002-TRU, dated 01.08.2002. In any event, the
appellant paid the tax before issue of show cause notice. Thus the
delay of payment of tax is due to the interpretation of statutory
provision of law. Therefore the imposition of penalties is not
warranted.
8. Modern Machinery Store V. Commissioner of Central Excise, Jaipur -
I - 2008 (12) STR 162 (Tri. Del)
The appellant is rendering the services under the category of
'Authorized Automobile Service Station'. The Board's Circular dated
06.11.2006 indicates that there were certain doubts have arisen in
respect of activities undertaken by authorized motor vehicle dealers
and service stations and as to whether the commission received by the
automobile dealers from Banks/Non Banking Finance Corporations for
introducing the customer from seeking finances/loans to such banks/Non
banking Financial Corporations is to be subjected to service tax. The
Board clarified in such cases that the tax is payable on the
commission received by the automobile dealers.
The tribunal found that there is confusion in the trade about
liability of tax on such activity. After the Board's circular the
appellant voluntarily deposited the service tax before issue of show
cause notice. There is no mala fide intention on the part of the
appellant for delay on payment of service tax. In view of the above
the tribunal found that the penalties are not warranted.
9. Steel Craft (India) V. Commissioner of Central Excise, Jalandhar -
2008 (12) STR 125 (Tri. Del)
The appellant took a specific stand that they are providing the
service of job worker and prior to10.9.2004 the same was exempted
under Notification No. 25/2004 and therefore not liable to pay service
tax prior to 10.9.2004. After that they are willing to pay tax. They
paid along with interest at their own before issuance of adjudication
order. Sec. 80 provides notwithstanding anything contained in the
provisions of Sec. 76 or 78, the penalty shall not be imposable on the
assessee for any failure if he proves that there was reasonable cause
for such failure. In this case the appellant proves that there was
reasonable cause for not paying the service tax. It is not a fit case
for imposition of penalty under Sec. 76 or 78.
10. Green Garden Services V. Commissioner of Central Excise & Customs,
Nashik - 2008 (12) STR 133 (Tri. Mumbai)
The applicant is unable to state any genuine reason for delay in
deposit of service tax and filing of returns. The delay is of repeated
nature and range from 41 days to 229 days. The only plea is that the
tax was paid along with interest. The tribunal rejected the prayer for
waiver of pre deposit of penalty.
11. Commissioner of Central Excise, Mangalore V. Wood Worth
Construction - 2008 (12) STR 12 (Tri. Bang)
Both service tax and interest are paid after lapses are point out. It
is not proper to waive interest in the absence of provision for such
waiver. Interest liability is to be discharged.
Dated: - December 28, 2009
--
Regards,
Parthiv Mehta
Go Green
P Please consider the environment before printing this e-mail. 1 ton of
paper = 17 trees. Reduce. Reuse. Recycle.
------------
DISCLAIMER
AURANGABAD_CA is a Yahoo Group for the benefit of CA and other professional.
It is especially meant for written discussion within group members and
circulate the information among its members. The mail may contain such
research/advice/
and every contain of the mail or information of yahoo is always subject to
the Accuracy and of the description of facts.
The Aurangabad_CA , its moderator/owner do not claim that contains in
mail/information obtained after reading as a complete and accurate
disclosure of relevant fact(s).
Considering all above facts m the transaction based on above mail may not
complete without confirming proper statue/authority/
action/transaction taken on basis of this mail do not imply the accuracy or
value . Further this Group's Owner/Moderator/
damages or costs suffered due to action/transaction based on information on
this Yahoo Group.
For Seeking any Clarification you may mail only to Group Moderator on
girishkulk@gmail.
Yahoo! Groups Links
AURANGABAD_CA is a Yahoo Group for the benefit of CA and other professional. It is especially meant for written discussion within group members and circulate the information among its members. The mail may contain such research/advice/opinion/information/fact provided by any member or moderator and every contain of the mail or information of yahoo is always subject to the Accuracy and of the description of facts.
The Aurangabad_CA , its moderator/owner do not claim that contains in mail/information obtained after reading as a complete and accurate disclosure of relevant fact(s).
Considering all above facts m the transaction based on above mail may not complete without confirming proper statue/authority/person. Therefore any action/transaction taken on basis of this mail do not imply the accuracy or value . Further this Group�s Owner/Moderator/Member are not liable for any damages or costs suffered due to action/transaction based on information on this Yahoo Group.
For Seeking any Clarification you may mail only to Group Moderator on
girishkulk@gmail.com
0 comments:
Post a Comment