Late Fee
As per provisions contained in Section 70 of the Finance Act, 1994, a person liable to pay Service tax is required to file periodical return in prescribed form with late fee for delayed furnishing of return. It also provides the maximum amount of late fee payable.
Rule 7 of Service Tax Rules, 1994, prescribes the manner of filing returns and also mandates that such return is to be filed by 25th of the month following the particular half yearly period to which the return relates. In other words, return in Form ST-3 for the period April to September is to be filed by 25th of October and that for the period October to March by 25th of April.
The said Rule 7 also provides that if the return is not filed by the specified due date, the assessee is required to submit the return with late fee for the period of delay.
The scale of late fee payable has been prescribed in Rule 7C of Service Tax Rules, 1994 subject to maximum as prescribed under Section 70 of the Finance Act, 1994.
By Section 74 of the Finance Act, 2011, the said Section 70 has been amended so as to revise the maximum amount of such late fee from Rs. 2000/- to Rs. 20,000/-. This amendment has come in to effect from 08.04.2011.
The scale of late fee payable as prescribed under Rule 7C of Service Tax Rules, 1994 is as follows: -For delay of 15 days, late fee will be Rs. 500/-. -For delay over 15 days but not later than 30 days, late fee will be Rs. 1000/-. -Beyond 30 days, the late fee payable is Rs. 1000/- plus Rs. 100/- per day from 31st day till date of the furnishing of ST-3 Return. ---However, the maximum amount payable shall not exceed Rs. 20,000/- .
If service tax return for the year 2008-09 is not filed till date, it can be said that, payment of late fees is relatable to period of delay in filing return and is not relatable to assessment period. In other words, the period between the due date and the actual date of filing return is relevant for calculating the amount of late fees and such amount is required to be calculated as per rates prescribed in Rule 7C of the Service Tax Rules, 1994 existing on the date of filing the return.
Under the circumstances, the maximum amount of late fee as revised by Finance act, 2011 will be applicable to all the delayed returns filed after 08.04.2011 irrespective of the period to which such return relates.
Penalty