What are the consequences for not paying Service Tax?

Penalty for late filing of Service Tax

Service tax are to be paid before due date in order to free from penalty, if, service tax is filed after the due date a penalty up to Rs 10,000 may be charged[sec. 77(2)]

According to section 7C of Service Tax Rules, 1994 late fee is payable as follows:

Delay up to 15 days

Rs. 500

Delay beyond 15 days and up to 30 days

Rs. 1,000

Delay beyond 30 days

Rs 1,000 + 100 per day of default subject to a maximum of Rs 20,000

 

If late fee is paid in accordance with 7C of Service Tax Rules, 1994, no penalty is payable under section 77(2)

 

Penalty for failure to pay Service Tax

Section 75 specifies any person, who fails to pay service tax, shall pay, in addition to such tax and the interest on that tax amount, a penalty of;

– Rs 100 for every day during which such failure continues; or

– @ 1 % of such tax, per month, whichever is higher, starting with the first day after the due date till the date of actual payment of the outstanding amount of service tax

 

Note:  total amount of the penalty payable shall not exceed 50% of the service tax payable.

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