CA Manish Garg
Budget 2015 came with many of the amendment covering the exempt field under tax net. With the implementation of the same the penalty under the service tax is streamlined along with some harsh measure. Section 80 has been deleted from the book of Finance Act, now even in the case of reasonable cause of mistake service providers has to pay the penalty. Further the relaxation provided earlier related to reduction in penalty, if true and complete details of transaction were available on specified records has been removed. It seems that department is trying to make a wall of harsh provisions around the mistakes done the service industry.
No demand notice is necessary for admitted liability
With the introduction of new sub-section (1B) as amendment in section 73, the self-assessed amount and disclosed in the return can now be recovered from the assessee without the issuance of show cause notice. Now if the amount involved is high, it is better to delay filing of ST-3 and pay late fee of Rs 20000.
Changes in Section 76 of the Finance Act, 1994:-
Section 76 has been amended to rationalize the provisions relating to penalties in cases not involving fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or rules with the intent to evade payment of Service tax, in the following manner:
Changes in Section 78 of the Finance Act, 1994:-
Section 78 has been amended to rationalize the provisions relating to penalties in cases involving fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or rules with the intent to evade payment of Service tax, in the following manner:
The new provisions of penalty shall apply if adjudication order was not passed before the Financed Bill, 2015 is passed and assented by President of India. If true and complete details of transactions were available in specified records, penalty shall not exceed 50% amount – proposed section 78B of Finance Act, 1994.
No touch on the grey areas of litigations
Still the government has not given the clarification regarding the grey areas of service tax on which various issues has already risen; for example, the service tax on casual labour in case of manpower supply service, double taxation under VAT and service tax. Instead of clarifying the same government put the reimbursement expenses under service tax net, now the service provider once will pay service while availing the service as input and also pay the service tax when recover the same from the service receiver.
With all this government is trying to collect as much as possible from the pocket of the consumer but somewhere the harsh provision will somewhere force the assessee to deposit the tax on time and correct manner.