Service tax

This query is : Resolved 
 

(Querist)
10 April 2014

Dear Experts,
Kindly advise me that If a business man running his business of work contacts and his turnover is above 25 lakhs without getting registered under Service Tax ST-2, in A.Y. 2010-2011, 2011-2012, 2012-2013, and now in the year 2013-2014 he himself registered under ST-2,Now my question is according to Financa Act, 1994 any service provider whose turnover exceed 9 lakh have to get registered under Service Tax, Is the Service Tax Department can sent a notice of show cause for not getting registered under ST-2, before i.e. A.Y. 2010-2011, 2011-2012 & 2012-2013. Is in this above case a omission of law has been done from the assesse part.
Thanking you.


R.V.RAO (Expert)
10 April 2014

you missed a good opportunity under voluntary compliance scheme under serv.tax defaulters which was open till 31/12/2012.

you have also missed out an earlier opportunity by not complying the serv.tax law before 2011-12, because in budget 2011-12,Rate of Interest for delayed in payment of Service Tax was increased from 13% to 18%
Maximum penalty/late fees for delay in filing Service Tax return hiked from Rs.2,000/- to Rs.20,000/
Every person providing taxable service and liable to pay the service tax should make an application to the concerned Central Excise officer for registration within a period of 30 days from the date of commencement of his activities.Non registration or delayed registration: An amount which may extend to Rs. 5000/- or Rs.200/- for every day during which such failure continues, whichever is higher could be imposed as penalty under sec 77(1 )(a) of the Act. ii. Non payment or delayed payment of service tax- A mandatory penalty, not less than Rs.200/- for every day during which such failure continues or @ 2% of such tax per month, whichever is higher, shall be imposed by the adjudicating authority. However, the penalty amount payable shall not exceed the amount of service tax payable. [Section 76 of the Act] iii. Non-filing / delayed filing of returns: A mandatory penalty has been prescribed under Rule 7C of the Service Tax Rules, 1994, as also an amount not exceeding Five Thousand Rupees could be imposed as penalty under sec 77 of the Act.
source:
http://www.caclubindia.com/forum/penalty-provisions-under-the-service-tax-law-116515.asp





Neeraj Kumar Giri (Querist)
10 April 2014

Respected Rao Sir,
But my question is that while in the A.Y. 2010-2011 to 2012-2013 the job done by me without charging any service tax but the gross turnover in that particular year is above 25 Lakhs and now the problem is that can Department ask me for payment of service tax as my turnover is above 9 lakhs and if the Department ask me to pay tax then how could I justify that in the previous bills I have not raised any Service Tax.


Surrender K Singal (Expert)
10 April 2014

Non collection of S T can not be an excuse; You have really missed out on the AMNESTY scheme that was so well publicised across the country; Better to find if your service receivers have deposited on their own, as they may be eligible to take credit for payment of their CENVAT liability, if at all ?

Surrender K Singal (Expert)
10 April 2014

All those previous Billed amounts can be considered as inclusive of ST;

Suhail A.Siddiqui (Expert)
10 April 2014

WITH OUT GOING INTO THE ABOVE EXPERTS ADVISE, WHICH IS MOST CORRECT AND USEFUL ADVISE, U R LIABLE FOR PENAL ACTION BY THE SERVICE TAX DEPARTMENT. DEPARTMENT CAN GET INFORMATION ABOUT YOUR SERVICES FROM YOUR BANK ETC.

Rajendra K Goyal Online (Expert)
10 April 2014

Well advised by the experts, agree to it.

T. Kalaiselvan, Advocate Online (Expert)
10 April 2014

I too agree with the vie expressed by experts in this regard, nothing more to add.

R.V.RAO (Expert)
11 April 2014

Service tax on works contract was introduced from june 2007.the taxable service in respect of works contract has also been defined below.

Date of Introduction: 01.06.2007 vide Notification No. 23/2007-S.T., dated
22.05.2007
(B) Definition and scope of service:
“Taxable Service” means any service provided or to be provided to any person, by
any other person in relation to the execution of a works contract, excluding works contract in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams.

source:
http://www.servicetax.gov.in/st-profiles/works-contract.pdf

please check if you fall into the above category of taxable service.
if so then you are liable under serv.tax act,to collect and deposit tax.
if you have not shown the tax in bills separately,you were deemed to have included serv.tax in your billing amount.
pl. call on a serv.tax advocate and do needful without delay.

R.V.RAO (Expert)
11 April 2014

Service tax on works contract was introduced from june 2007.the taxable service in respect of works contract has also been defined below.

Date of Introduction: 01.06.2007 vide Notification No. 23/2007-S.T., dated
22.05.2007
(B) Definition and scope of service:
“Taxable Service” means any service provided or to be provided to any person, by
any other person in relation to the execution of a works contract, excluding works contract in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams.

source:
http://www.servicetax.gov.in/st-profiles/works-contract.pdf

please check if you fall into the above category of taxable service.
if so then you are liable under serv.tax act,to collect and deposit tax.
if you have not shown the tax in bills separately,you were deemed to have included serv.tax in your billing amount.
pl. call on a serv.tax advocate and do needful without delay.

R.V.RAO (Expert)
11 April 2014

Service tax on works contract was introduced from june 2007.the taxable service in respect of works contract has also been defined below.

Date of Introduction: 01.06.2007 vide Notification No. 23/2007-S.T., dated
22.05.2007
(B) Definition and scope of service:
“Taxable Service” means any service provided or to be provided to any person, by
any other person in relation to the execution of a works contract, excluding works contract in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams.

source:
http://www.servicetax.gov.in/st-profiles/works-contract.pdf

please check if you fall into the above category of taxable service.
if so then you are liable under serv.tax act,to collect and deposit tax.
if you have not shown the tax in bills separately,you were deemed to have included serv.tax in your billing amount.
pl. call on a serv.tax advocate and do needful without delay.

R.V.RAO (Expert)
11 April 2014

Service tax on works contract was introduced from june 2007.the taxable service in respect of works contract has also been defined below.

Date of Introduction: 01.06.2007 vide Notification No. 23/2007-S.T., dated
22.05.2007
(B) Definition and scope of service:
“Taxable Service” means any service provided or to be provided to any person, by
any other person in relation to the execution of a works contract, excluding works contract in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams.

source:
http://www.servicetax.gov.in/st-profiles/works-contract.pdf

please check if you fall into the above category of taxable service.
if so then you are liable under serv.tax act,to collect and deposit tax.
if you have not shown the tax in bills separately,you were deemed to have included serv.tax in your billing amount.
pl. call on a serv.tax advocate and do needful without delay.

Surrender K Singal (Expert)
12 April 2014

Follow the advices

ajay sethiOnline (Expert)
12 April 2014

agree with Mr Rao

Neeraj Kumar Giri (Querist)
21 August 2014

Respected Sir,
I would like to tell you that non-collection of Service Tax because I was not registered under Service Tax before i.e. A.Y.2012-13 and as such I have not collected or concealed any tax, merely I was not registered before Service Tax it means, if I had done Rs. 50 Lakhs work in A.Y. 2012-13 then it means I have to pay 12.36% on entire turnover of Rs.50 Lakhs, I would be a huge amount to pay for anybody because the receiver of service will deny to pay me the service tax on previous bills, So, how can I give so huge amount from my pocket. Kindly advice me is there any other way to solve this problem or any circular or any case law similar to my query. Please do reply it is urgent for me. Thanks You please.,

Anirudh (Expert)
21 August 2014

Dear Mr. Neeraj Kumar,

Please understand. What is being told to you is the legal position.

If you have not registered under the Service Tax (even though your turnover in the A.Y. 2012-13 or any other earlier year is above Rs. 9 lakhs) is your mistake. For that you will be taken to task by the Department. Experts have already indicated to you as to what will be the consequences.

By committing one mistake of not getting your registered under Service Tax, you cannot again state the same reason for not collecting the Service Tax which you are bound to do under the Statute. You cannot offer such kind of excuses and the Department will not buy and no court will come to your rescue.

Whether your clients will be ready to pay you, or you yourself have to bear the service tax is entirely your botheration.

Nothing is urgent for you. The experts gave the reply to your query 4 months back and you are coming back here only now.

Surrender K Singal (Expert)
21 August 2014

You may sugggest to your clients to pay after taking credit of the S.Tax that they may utilise against their current ST or CENVAT liability; In fact, you have missed a golden opportunity of Amnesty last year !

Neeraj Kumar Giri (Querist)
22 August 2014

Respected Sir,
I am very thankful for your advice, but can Service Tax Department allow me to utilize the facility for abatement, means if I have done the work contract on previous bill is Rs. 20 Lakhs, will they consider the tax on 100% of gross bill or allow abatement and charge the tax on 40% of the previous bill.
Please reply.

Surrender K Singal (Expert)
22 August 2014

Better enquire from the concerned Deptt. itself -they may understand your issues to help in the given state of affairs that you have landed yourself in



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