SERVICE TAX QUERY

[prashant arya]

Hello Friends ,
 
A private ltd company incorporated in FY 2010 -11 has taken service tax registration in 2010-11. The service income is below 3 lacs every year on which no service tax is being charged as the same is below the taxable limit. Since there was no service tax , no return was filed by the company.
Now the company has received some new orders for FY 2013-14 in which the service income will be more than 10 lakhs per annum.
 
Kindly advise the following about the previous years:
1. Whether previous returns are to be filed ?
2. Whether penalty of Rs.20000/- will be imposed ?
3. Is it mandatory to charge the service tax , once the company is registered under service tax?
4. Can department ask for calculating reverse chargeablity of service tax ie on Rs.3 lakh each year ?
5. Can the same fall under VCES scheme? 
 
Thanks & regards
 
Prashant Arya
Mob:9818070049

[Aseem Varshneya]

Dear Prashant,

The liability arises only when service is rendered

Further, for reverse charge mechanism, no benefit
of SSI clause can be taken. Since, liability has
arisen in Fy 13-14 only, service tax liability is
discharged for the same year

1. Whether previous returns are to be filed ? -
Nil as no liability for service tax. However, if
reverse charge was present, then yes as no
exemption for reverse charge mechanism from
threshold limit

2. Whether penalty of Rs.20000/- will be imposed ?

- Same as above

3. Is it mandatory to charge the service tax ,
once the company is registered under service tax?

- No correlation between registration and payment.
If service is rendered, registration is necessary
and payment is necessary

4. Can department ask for calculating reverse
chargeablity of service tax ie on Rs.3 lakh each

year ? - Yes, as no exemption from threshold limit
for reverse charge mechanism
5. Can the same fall under VCES scheme? - Yes, if
any liability arises on account of reverse charge
in the previous years

Regards



prashan
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25-12-2
013
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