Penalty Under Service Tax

Service tax is an indirect tax imposed by the government on service providers for certain services which are borne by customers. The following are the various penalties for non-conformance under the Service Tax Act. Note: Service tax is no longer applicable in India. All entities registered under service tax would have to migrate to GST and obtain

GST registration. Know more about penalty under GST.

Penalty for Non-Payment of Service Tax

A person is liable to 10% penalty of his service tax in case of non-payment of the same.
No penalty if service tax and interest is paid within 30 days of service of notice.
If service tax is paid along with interest and reduced penalty within 30 days of service of order, then 25% of penalty should be paid as mentioned in the order.
The penalty can be waived off on submission of valid documents which describes a proper reason for the delay or non-payment of the service tax.

Penalty for Not Obtaining Registration

Failure for not obtaining service tax registration can attact a penalty of Rs.10,000 or Rs. 200 per day during which default continuous.

Penalty for Non-Maintenance of Documents

If a person fails to maintain the record and documents related to service tax a penalty of upto Rs.10,000 can be levied.

Penalty for Not Furnishing Required Information

If a person fails to submit proper documents when called by an officer, a penalty of Rs.10,000 or Rs. 200 per day during which default continuous can be levied.

Penalty for Submitting Incorrect Invoices

For furnishing incorrect or incomplete details of invoice, a penalty of up to Rs. 10,000 can be levied.

Penalty for Late Filing Service Tax Return

The penalty for late filing of service tax return is capped at a maximum of Rs.20,000 and is subject to the number of days delayed.

Up to 15 days delay in filing service tax return - Rs.500
Between 16 - 30 days delay in filing service tax return - Rs.1,000
More than 31 days delay in filing service tax return - Rs.100 per day of default.

Penalty for Offences by Director of Company

A penalty up to Rs.1 lakh can be imposed on any director, manager, secretary or any other officer of a company if the company has committed any of the below contraventions:

Evasion of service tax
Issuance of invoice, bill or challan without provision of taxable service
Utilizing the credits of duty without actual receipt of taxable service
Failure to pay any amount collected as a service tax to the Central Government beyond a period of 6 months from the date on which the payment becomes due.

Penalty for Other Default

For violating any provisions of law pertaining to service tax, a penalty of Rs.10,000 can be levied. The penalty can be levied on reasonable causes.

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Frequently Asked Questions

Common questions about Service Tax Penalties Overview.

Service tax was an indirect tax imposed by the Indian government on service providers for certain services, which was ultimately borne by the customers. However, service tax is no longer applicable in India as it has been subsumed under the Goods and Services Tax (GST) regime.

A person is liable to pay a penalty of 10% of the unpaid service tax amount in case of non-payment. However, if the service tax and interest are paid within 30 days of the service of notice, no penalty is imposed.

Yes, the penalty for non-payment of service tax can be waived off if valid documents are submitted, describing a proper reason for the delay or non-payment.

Failure to obtain service tax registration can attract a penalty of Rs. 10,000 or Rs. 200 per day during which the default continues, whichever is higher.

If a person fails to maintain records and documents related to service tax, a penalty of up to Rs. 10,000 can be levied.

If a person fails to submit proper documents when called by an officer, a penalty of Rs. 10,000 or Rs. 200 per day during which the default continues, whichever is higher, can be levied.

For furnishing incorrect or incomplete details on an invoice, a penalty of up to Rs. 10,000 can be levied.

The penalty for late filing of service tax returns is capped at a maximum of Rs. 20,000 and is subject to the number of days delayed. The penalty ranges from Rs. 500 for a delay of up to 15 days to Rs. 100 per day of default for delays exceeding 31 days.

Yes, a penalty of up to Rs. 1 lakh can be imposed on any director, manager, secretary, or other officer of a company if the company has committed service tax-related offenses such as evasion, issuing invoices without providing taxable services, or failing to pay collected service tax to the government.

For violating any other provisions of the law pertaining to service tax, a penalty of Rs. 10,000 can be levied on reasonable grounds.