amarchand & mangaldas & suresh a. shroff & company

Service Tax: Advance Rulings, Appeals, Interest, Penalties Service Tax: Advance Rulings, Appeals, Interest, Penalties and Prosecutionsand Prosecutions

Mekhla AnandAmarchand & Mangaldas & Suresh A. Shroff & Company

July 2, 2011

mekhla.anand@amarchand.com

Agenda

Advance RulingsAdvance Rulings

Advance Rulings : Scope

Advance Rulings : Scope

Advance Rulings : Who Can Apply?

Advance Rulings: Procedure

Advance Rulings: Procedure

Advance Rulings: Key Considerations

Appellate Remedies in Service TaxAppellate Remedies in Service Tax

Appeal to Commissioner (Appeals)

Appeal to Commissioner (Appeals)

Appeal to Tribunal

Appeal to Tribunal

Appeal to High Court/Supreme Court

InterestInterest

Interest

Interest

Calculation of interest

Interest: Key Considerations

PenaltiesPenalties

Penalties

Penalty Provisions

Provision Particulars Penalty

70 Delay in filing returns INR 20,000/-

76 Failure to pay service tax

INR 100 per day during which failure continues or 1% tax per month whichever is higher

Capped at 50% of the value of service tax

Penalty order required to be a speaking order

Penalty Provisions

Provision Particulars Penalty

77 Penalty for specified contraventions:

Failure to get registered INR 10,000/- or INR 200/per day whichever is higher

Failure to furnish information, produce documents or appear before Central Excise Officer

INR 10,000/- or INR 200/per day whichever is higher

Failure to keep, maintain and retain books of accounts

INR 10,000/-

Failure to pay tax electronically INR 10,000/-

Issuance of invoices with incorrect or insufficient details or non accounting thereof

INR 10,000/-

Penalty Provisions

Provision Particulars Penalty

78 Suppression of taxable value on account of a.Fraudb.Collusionc.Willful misstatementd.Suppression of factse.Intention to evade tax

Equal to the amount of service tax

Mitigation available where true and complete information captured to 50% of the tax amount

Where tax is paid within a period of one month along with interest and penalty: amount reduced to 25% of the tax amount

For small service providers time period for payment of tax amount and penalty increased to 90 days

• Penalty under Section 76 and Section 78 mutually exclusive

• Waiver of penalty under Section 80 only where records maintained

Prosecution

Provision Particulars

89 Provision or receipt of service without issuance of an invoiceAvailment and utilisation of CENVAT credit without actual receipt of inputs/input servicesMaintaining false books of accounts or failure to supply any information or false informationNon payment of service tax collected for a period more than 6 months

• Punishment• If amount > 50 Lakhs – Imprisonment upto 3 years• Others – Imprisonment upto 1 year

• No power of arrest

• Prosecution can be launched only with the approval of the Chief Commissioner

Thank YouThank You