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Penalty on late filing of return - Service Tax

Issue Id: - 3266
Dated: -12-08-2011
By:- Atul Gupta
Penalty on late filing of return

Hi Friends,

Please clarify whether maximum penalty of Rs. 20000/- on late filing of service tax returns applies to the returns filed for half year ended on 31.03.2011 or it will start to apply on the returns for the period 01.04.2011 to 30.09.2011?

Thanks  & Regards

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Dated: - 12-08-2011
By: - CA Rachit Agarwal

Notification is respect of penalty for non-filing of return will be applicable from date of passing of notifications. In view of the above in our opinion it would become applicable for March 2011.

Dated: - 13-08-2011

Dear Sir,

The penal provisions of late filing of service tax return are contained in Section 70 of the Finance Act and Rule 7C of the Service Tax Rules, 1994 which reads as under:

Every person liable to pay the service tax shall himself assess the tax due on the services provided by him and shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency and with such late fee not exceeding twenty thousand rupees rupees, for delayed furnishing of return, as may be prescribed.’

In addition, Rule 7C of the Finance Act states the amount to be paid if there is delay in submission of return. The amount to be paid is as under.

Period of delay

Amount to be paid

15 days

Rs 500

More than 15 days but upto 30 days

Rs 1,000

More than 30 days

Rs 1,000 + Rs 100 for every day till the default continues subject to maximum amount stated in section 70

[i.e., maximum amount to be paid is Rs 20,000]


The maximum penalty of Rs 20,000 which has been increased from Rs 2,000 will be applicable from 01-04-2011.

From the harmonious construction, the provisions for late filing of return can be summed up as under:

Return relates to April 2010 to September, 2010  whose due date is 25th October, 2010

If the return is to be filed on say 16th August, 2011. In such case, penalty will be Rs 15,800 [Rs 2,000 till 31-03-2011 plus Rs 100 for every day for 138 days from 01-04-2011]

Return relates to October 2010 to March, 2011  whose due date is 25th April, 2011

If the return is to be filed on say 16th August, 2011. In such case, penalty will be Rs 9,300 [Rs 1,000 till 25-05-2011 plus Rs 100 for every day for 83 days from 26-05-2011]


Hope, the above point has resolved the issue.


CA Rohan Thakkar

+91 922 872 05 36

Dated: - 17-08-2011
By: - pradeep khatri

I do agree with the replies given by our experts.

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