Late filing of return & late payment of tax.
prasad
(Querist) 21 February 2010
This query is : Resolved
My client has recently obtained registration and paid the service tax for the July-Sept2009 quarter and Oct - Dec 2009 quarter alongwith the interest. He had ignorantly but rightfully collected the tax from his clients right from the first day i.e 1st of July, 2009.Now I want to file his return for April - Sept 2009.
Will it be advisable to submit a letter with the return explaining the reasons for delay in depositing the tax and consequential delay in filing the return and apologizing for the same?Will such a voluntary disclosure of facts add weight to my case and reduce the chances of penalty being levied on various counts? Mind you tha amount invoved is not big.The quarterly tax payment is Rs 47000 and 62000 respectively.
Or should i wait for the Officer to issue a SCN.Pls advise.
Also, since my client has ignorantly but rightfully collected the tax from his clients but deposited it late after he was made aware by his CA of his obligation to do so, has done it voluntarily before receiving any notice from the dept and their was neither any intent to default or defraud the Revenue and there has been no loss to the Revenue. Under these circumstances, can the Officer invoke Section 76 to impose penalties.
Kumar Thadhani
(Expert) 22 February 2010
Your reson for not filing the service tax returns and not depositing the tax should be genuine and that you will have to satisfy that there was resonable ground provided that there is no intention to dfault or defraud the revenue.
APARNA NANDAKUMAR
(Expert) 24 February 2010
dear Mr.Prasad,
Your client ought to have filed the half yearly returns by 25th of Oct.2009. However, the Act itself provides the corrective measure in case of belated filing of return. As per section 70(1) of the Finance Act,1994 read with rule 7C of the Service Tax Rules,1994, you have to pay a late fee not exceeding Rs.2000/- for each late return. In your case, since the delay is more than 30 days, the late fee is Rs.2000/-. Rule 7C second proviso, maks it clear that once the amount for delayed filing of return has been made, the proceedings are deemed to be concluded. The Central Board of Excise and Customs (CBEC) has also clarified vide its circular dated 3-10-2007 that once the ax amount along with interest has been paid show cause notice need not be issued. This circular is in the context of section 73(2) proviso. Please refer to the decision of CESTAT, B'lore in VISTA INFOTECH v.Commissioner of Service TAx 2010(17) STR 343 for this point.
In the context of the above, please do to wait for the SCN. Kindly advise your client to file the returns with late fee and the issue concluded.For further clarification, you can contact me in 09600178450.
