As per Section 70(1), maximum late fees is 20,000 as shown below
|
Time Period Expired from due date of ST3 |
Late fees/Penalty |
|
Upto 15 Days |
500 |
|
16-30 Days |
1000 |
|
>30 days |
1000+100/day from 31th day onwards (Max 20000*) |
*Late fee may be reduced/waived where service tax payable is nil: Where the gross amount of service tax payable is nil, the Central Excise Officer may, on being satisfied that there is sufficient reason for not filling the return, reduce or waive the penalty (late fee) [Proviso to rule 7C]
Further, where the assessee has paid the prescribed late fee for delayed submission of return, the proceedings, if any, in respect of such delayed submission of return shall be deemed to be concluded.
Example: BCC Ltd. is engaged in providing taxable services. For the half year ended on 30 th September, it filed its return on:-
Case I: 9 th November
Case II: 23 rd November
Case III: 25 th January
Case IV 30 June
Determine the amount of late fee payable by BCC Ltd. in each of the independent cases
Ans
Due date for filing return for April to September is 25 th October
Late fees is as follows
CASE 1
Return filed on 9 th Novembe r
View AnswerNo of days from 26th October to 23rd November
=6+9
=15
Hence, late fee/penalty is Rs 500
CASE 2
Return filed on 23rd Novembe r
View AnswerNo of days from 26th October to 23rd November
=6+23
=29
Hence, late fee/penalty is Rs 1000
CASE 3
Return filed on 25 th Januar y
View AnswerNo of days from 26th October to 25 th January
=6+30+31+25
=92
Hence, late fee/penalty is
Rs 1000+(92-30)*100
=Rs1000+62*100
=Rs 7200*
(This amount cannot be more than Rs 20000)
CASE 4
Return filed on 30 th June
View AnswerNo of days from 26th October to 30 June
=6+30+31+31+28+31+30+31+30
=248
Hence, late fee/penalty is
Rs 1000+(248-30)*100
=Rs1000+218*100
=Rs 1000+21800=22800
(This amount cannot be more than Rs 20000)
Hence late filing fees=20000
Note:-
If the gross amount of service tax payable by BCC Ltd. is nil, the Central Excise Officer may, on being satisfied that there is sufficient reason for not filling the return, reduce or waive the penalty (late fee).
Exam Questions
Question 21
A service provider has not been able to file the half yearly service tax return by the prescribed
due date. He is worried and does not know what recourse is available to him in this situation.
He seeks your help on the issue. What advice will you offer him?
Service tax law provides for delayed filing of returns. A half-yearly return can be filed after the
due date with prescribed late fee. The prescribed late fee is given hereunder:
| Period of delay | Late fee |
| 15 days from the date prescribed for submission of the return | Rs. 500 |
| Beyond 15 days but not later than 30 days from the date prescribed for submission of the return. | Rs. 1,000 |
| Beyond 30 days from the date prescribed for submission of the return | An amount of Rs. 1,000 plus Rs. 100 for every day from the 31st day till the date of furnishing the said return. |
However, such late fee cannot exceed Rs. 20,000. Further, if the gross amount of service tax
payable is nil, such late fee may be reduced/waived by the Central Excise Officer on being
satisfied that there was sufficient cause for the delay.
