Upgrad LLM

how much period can be covered in service tax scn


The service tax department conducted enquiry on assessee (Partnership Firm) on 02-01-2016; and find huge irregularity in service tax; the department wants to invoke extended period in terms of proviso to section 73 (1). How much period can be covered of FY 2010-11 (Ist half or IInd half or both) where assessee has filed its service tax returns for first half on 25-10-2010 and for second half on 25-04-2011 and deposited service tax liability on 5th of the following month from end of Quarter.
 

 
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Advocate

A local tax consultant may be approached for more details reply to this query.

 
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Legal Adviser

This is quite severe technical question, kindly consult local lawyer

 
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Consultant in Indirect Tax Matters

Dear Jithendra,

Section 73 deals with recovery of Service Tax not paid/levied/short paid or erroneously refunded. The general period for issue of notice is 18 months and in the event of fraud, collusion, mis-statement or intend to evade ST the department can invole the extended period of limitation up to 5 years from the date of detection of such irregularity. In this connection, the general principle is that the proof of burden that the service provider / Assessee not paid the duty under the circumstances stated therein under such proviso, always on the department .

Though you have stated that the department noticed certain irregularities in your query, the details of irregularities are not mentioned and in the absence of that it would be difficult to give any adivce whether the assessee (LLP) is attracted the said provision.

Further, if you are confident that the irregularities noticed by the department are not covered in the situations of  fraud, collusion, mis-statement or intend to evade ST etc., you can challenge the notice/letter if, any given justifying that such irregularities are not fall under the ambiguity of events attaracts invokation of extended period.

Regards

Surya

 

 
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