CA Sandeep Kanoi

CA Sandeep KanoiPenalty of Late Filing of Service Tax Return Filing is been increased with effect from 08.04.2011 to a Maximum of Rs. 20000/- and same is not been changed thereafter. In this Article we have discussed Provisions Related to Late Filing of Service Tax Return.

File Service Tax Return in time as Maximum Penalty increased 10 times to Rs. 20000

Under the existing scheme of law, Rule 7 of the Service tax Rules, 1994 read with its sub-rules deals with the provisions relating to the filing of service service tax return.

Rule 7C Prescribe the Penalty which Assessee has to Pay if there is delay in filing of service Tax Return.

We are producing herebelow the extract of Rule 7C

Where the return prescribed under rule 7 is furnished after the date prescribed for submission of such return, the person liable to furnish the said return shall pay to the credit of the Central Government, for the period of delay of-
(i) fifteen days from the date prescribed for submission of such return, an amount of five hundred rupees;
(ii) beyond fifteen days but not later than thirty days from the date prescribed for submission of such return, an amount of one thousand rupees; and
(iii) beyond thirty days from the date prescribed for submission of such return an amount of one thousand rupees plus one hundred rupees for every day from the thirty first day till the date of furnishing the said return:

Provided the total amount payable in terms of this rule  shall not exceed  the amount  specified in Sec.70 of the Act.

It is clear from the above that above penalty is subject to maximum specified in section 70. Section 70(1) Specify the maximum Penalty of Rs. 2,000/- in respect of  return filed up to 31st March 2011. This amount of Maximum Penalty is been increased to Rs. 20,000/- (Twenty Thousand only) w.e.f. 01.04.2011.

As per Section 71 (C) of the Finance Act 2011 (8 of 2011) Applicable from 1st April Unless Otherwise specified there was an amendment in Sub Section (1) of section 70 which is as follows:-

‘in Section 70 (1) of the Finance Act, 1994, for the words “two thousand rupees”, the words “twenty thousand rupees” shall be substituted’.

After Considering the above amendment the Maximum Penalty for Late Filing of Service Tax Return is been increased to 20000/- (Twenty Thousand) w.e.f. 08.04.2011 from earlier 2000/- (Two Thousand).

After enactment of Finance Bill 2011, the following position will emerge out:

Period of DelayPenalty/late fee before finance bill 2011Penalty/late fee After Finance Act, 2011 (W.e.f. 08.04.2011)
for delay up to 15 daysINR 500INR 500
for delay beyond 15 days but up to 30 daysINR 1,000INR 1,000
for delay beyond 30 daysINR 1,000 + INR 100 per day (from 31st day subject to a maximum amount of Rs 2000.INR 1,000 + INR 100 per day (from 31st day subject to a maximum amount of Rs 20000.

‘Provided also that where the gross amount of service tax payable is nil, the Central Excise officer may, on being satisfied that there is sufficient reason for not filing the return, reduce or waive the penalty’.

So File you return on time to avoid penalties.

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(Article was first Published on 13.04.2011 & Republished with modifications on 20.05.2016)

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