If no service is rendered by service provider, there is no requirement to file ST-3 Returns, as he is not liable to pay any service tax
No Need to file Service Tax return (ST-3) when no service is rendered during the relevant period and even not required to opt for VCES
We are sharing with you an important judgement of the Hon’ble Kolkata Tribunal in the case of M/s Suchak Marketing Pvt Ltd Vs. Comm. of Service Tax, Kolkata [2013 (6) TMI 641] and detailed analysis on following issue:
Issue:
Whether Service provider is required to file Service Tax Return where no service is rendered?
Facts of the case:
M/s Suchak Marketing Pvt Ltd (“the Assessee“ or “Suchak”) is registered under the taxable service category of constructions in respect of commercial or industrial building and civil structure services under Chapter V of the Finance Act, 1994 (“the Finance Act”).
During the period April, 2005 to March, 2008 the Assessee has not provided any service and also has not filed Service Tax Return. However the Assessee filed six “Nil” belated Service tax return for the period September, 2005 to March, 2008 on November 18, 2008.
Thereafter the Department issued a show cause notice proposing to impose penalty under Rule 7C of the Service Tax Rules, 1994 (“the STR”) and Section 77 of the Finance Act. The Adjudicating Authority vide the Order-in-Original ordered the Assessee to pay Rs. 12,000/-for each ST-3 Return under Rule 7C of STR for late filing of Service Tax Return and also imposed penalty of Rs. 2,000/- under Section 77 of the Finance Act.
Subsequently, the Assessee against the Order-in-Original filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) confirmed the late fee of Rs.12, 000/- under Rule 7C of STR and dropped penalty under Section77 of the Finance Act.
Hence the Assessee filed the present appeal before the Hon’ble Tribunal challenging levy of late fee on the ground that it had not provided any services during impugned period and thus was not required to file service tax return.
Held:
The Hon’ble Tribunal waived penalty under Rule 7C of the STR and set aside order of the Commissioner (Appeals) relying on the Central Board of Excise and Customs (“the CBEC”) Circular No.97/8/07-ST dated August 23, 2007 and judgment of the Tribunal in the case of Amrapali Barter (P.) Ltd. Vs. CST [2013-TIOL-32-CESTAT-KOL] (“Amrapali Barter Case”).
The Hon’ble Tribunal observed that even in terms of Rule 7C of the STR in case of filing of NIL returns, the Assessing Officer has discretion to waive late fees for filing of ST-3 returns. Further the Tribunal observed that this is a fit case to invoke proviso to Rule 7C of the STR and waived late fees, relevant proviso of Rule 7C of the STR is as under:
“Provided also that 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 filing the return, reduce or waive the penalty.”
The relevant extract of the Circular and Amrapali Barter Case are as under for the ease of your reference:
As per para 6 of the Circular No. 97/8/07-ST, dated 23-8-2007, —
♦ The Service Tax return is required to be filed under section 70 of the Act read with rule 7 of the Rules, by 'any person liable to pay the Service Tax'.
♦ Persons who are not liable to pay service tax (because of an exemption including turnover based exemption), are not required to file ST-3 return.
CASES REFERRED TO
Amrapali Barter (P.) Ltd. v. CST [Order Nos. A-879-880 (Kol.) of 2012, dated 14-12-2012] (para 5).
A.K. Biswas for the Appellant.
In Amrapali Barter Case, the Service provider is registered with the Service Tax Authorities and has not provided any services during a particular return cycle and was also not liable to pay any service tax during that return cycle. The Hon’ble Tribunal has held that the service provider is not required to file the Service Tax Return (even nil return)
ORDER
1. This is an appeal filed by the appellant against the Order-in-Appeal No. 146/ST/Kol/2012 dated 7-5-2012 passed by Commr. of Central Excise (Appeals), Kolkata.
2. Briefly stated facts of the case are that the appellants are engaged in providing the taxable services under the category of construction in respect of commercial or industrial building and civil structure services. For rendering the said services, the appellants were registered with the service tax Department.
The appellants had filed six nil returns in ST-3 form for the period from September, 2005 to March, 2008 on 18-11-2008. Consequently, show-cause notice was issued to them proposing penalty under Rule 7C of the Service Tax Rules, 1994 and Section 77 of the Finance Act, 1994. The Adjudicating Authority directed the appellants to pay Rs. 12,000/-for each ST-3 Return and also imposed penalty of Rs. 2,000/- under Section 77 of the Finance Act, 1994 against the appellant. Aggrieved by the same, the appellant had filed appeals before the ld. Commissioner (Appeals). The ld. Commissioner (Appeals)
dropped the penalty under Section 77 of the Finance Act, but confirmed the penalty of Rs.12,000/- against the appellant under Rule 7C of Service Tax Rules. Hence the present appeal.
3. None present for the appellant in spite of notice of hearing having been sent to them well in advance.
4. The ld. A. R. appearing for the Department, has reiterated the findings of the Id. Commissioner (Appeals) and submitted that the ld. Commissioner (Appeals) Therefore, there is no reason to waive the late fees directed to be paid under Rule 7C of the Service Tax Rules, 1994.
5. Heard the Id. A.R. for the Department and perused the records. Undisputedly, the appellants were registered with the service tax Department for providing taxable services. It is also not in dispute that during the period April, 2005 to March, 2008, they have not provided any service and also they have not filed any returns with the Department. They have filed six ST-3 Returns belatedly on 18-11-2008. I find that in view of the Board's Circular No.97/8/07-ST, dated 23-08-2007, in the event, no service is rendered by the service provider, there is no requirement to file ST-3 Returns. The ld. A.R. could not produce anything contrary to the said Circular. Besides, I find that as per Rule 7C of the Service Tax Rules, in the event, nil returns are filed, the Assessing Officer had the discretion to waive the late fees for filing the ST-3 Returns. In my view, it is a fit case to invoke the proviso to Rule 7C and waive the late fees relating to the nil returns filed by the appellant during the period April, 2005 to March, 2008. A similar view has been held by this Tribunal in the case of Amrapali Barter (P.) Ltd. v. CST [Order No.A-879-880/Kol/2012, dated 14-12-2012]. In these circumstances, the order of the ld. Commissioner (Appeals) is set aside and the appeal filed by the appellants is hereby allowed.
Appeal is allowed.
We are sharing with you an important judgement of the Hon’ble Kolkata Tribunal in the case of M/s Suchak Marketing Pvt Ltd Vs. Comm. of Service Tax, Kolkata [2013 (6) TMI 641] and detailed analysis on following issue:
Issue:
Whether Service provider is required to file Service Tax Return where no service is rendered?
Facts of the case:
M/s Suchak Marketing Pvt Ltd (“the Assessee“ or “Suchak”) is registered under the taxable service category of constructions in respect of commercial or industrial building and civil structure services under Chapter V of the Finance Act, 1994 (“the Finance Act”).
During the period April, 2005 to March, 2008 the Assessee has not provided any service and also has not filed Service Tax Return. However the Assessee filed six “Nil” belated Service tax return for the period September, 2005 to March, 2008 on November 18, 2008.
Thereafter the Department issued a show cause notice proposing to impose penalty under Rule 7C of the Service Tax Rules, 1994 (“the STR”) and Section 77 of the Finance Act. The Adjudicating Authority vide the Order-in-Original ordered the Assessee to pay Rs. 12,000/-for each ST-3 Return under Rule 7C of STR for late filing of Service Tax Return and also imposed penalty of Rs. 2,000/- under Section 77 of the Finance Act.
Subsequently, the Assessee against the Order-in-Original filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) confirmed the late fee of Rs.12, 000/- under Rule 7C of STR and dropped penalty under Section77 of the Finance Act.
Hence the Assessee filed the present appeal before the Hon’ble Tribunal challenging levy of late fee on the ground that it had not provided any services during impugned period and thus was not required to file service tax return.
Held:
The Hon’ble Tribunal waived penalty under Rule 7C of the STR and set aside order of the Commissioner (Appeals) relying on the Central Board of Excise and Customs (“the CBEC”) Circular No.97/8/07-ST dated August 23, 2007 and judgment of the Tribunal in the case of Amrapali Barter (P.) Ltd. Vs. CST [2013-TIOL-32-CESTAT-KOL] (“Amrapali Barter Case”).
The Hon’ble Tribunal observed that even in terms of Rule 7C of the STR in case of filing of NIL returns, the Assessing Officer has discretion to waive late fees for filing of ST-3 returns. Further the Tribunal observed that this is a fit case to invoke proviso to Rule 7C of the STR and waived late fees, relevant proviso of Rule 7C of the STR is as under:
“Provided also that 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 filing the return, reduce or waive the penalty.”
The relevant extract of the Circular and Amrapali Barter Case are as under for the ease of your reference:
As per para 6 of the Circular No. 97/8/07-ST, dated 23-8-2007, —
♦ The Service Tax return is required to be filed under section 70 of the Act read with rule 7 of the Rules, by 'any person liable to pay the Service Tax'.
♦ Persons who are not liable to pay service tax (because of an exemption including turnover based exemption), are not required to file ST-3 return.
CASES REFERRED TO
Amrapali Barter (P.) Ltd. v. CST [Order Nos. A-879-880 (Kol.) of 2012, dated 14-12-2012] (para 5).
A.K. Biswas for the Appellant.
In Amrapali Barter Case, the Service provider is registered with the Service Tax Authorities and has not provided any services during a particular return cycle and was also not liable to pay any service tax during that return cycle. The Hon’ble Tribunal has held that the service provider is not required to file the Service Tax Return (even nil return)
ORDER
1. This is an appeal filed by the appellant against the Order-in-Appeal No. 146/ST/Kol/2012 dated 7-5-2012 passed by Commr. of Central Excise (Appeals), Kolkata.
2. Briefly stated facts of the case are that the appellants are engaged in providing the taxable services under the category of construction in respect of commercial or industrial building and civil structure services. For rendering the said services, the appellants were registered with the service tax Department.
The appellants had filed six nil returns in ST-3 form for the period from September, 2005 to March, 2008 on 18-11-2008. Consequently, show-cause notice was issued to them proposing penalty under Rule 7C of the Service Tax Rules, 1994 and Section 77 of the Finance Act, 1994. The Adjudicating Authority directed the appellants to pay Rs. 12,000/-for each ST-3 Return and also imposed penalty of Rs. 2,000/- under Section 77 of the Finance Act, 1994 against the appellant. Aggrieved by the same, the appellant had filed appeals before the ld. Commissioner (Appeals). The ld. Commissioner (Appeals)
dropped the penalty under Section 77 of the Finance Act, but confirmed the penalty of Rs.12,000/- against the appellant under Rule 7C of Service Tax Rules. Hence the present appeal.
3. None present for the appellant in spite of notice of hearing having been sent to them well in advance.
4. The ld. A. R. appearing for the Department, has reiterated the findings of the Id. Commissioner (Appeals) and submitted that the ld. Commissioner (Appeals) Therefore, there is no reason to waive the late fees directed to be paid under Rule 7C of the Service Tax Rules, 1994.
5. Heard the Id. A.R. for the Department and perused the records. Undisputedly, the appellants were registered with the service tax Department for providing taxable services. It is also not in dispute that during the period April, 2005 to March, 2008, they have not provided any service and also they have not filed any returns with the Department. They have filed six ST-3 Returns belatedly on 18-11-2008. I find that in view of the Board's Circular No.97/8/07-ST, dated 23-08-2007, in the event, no service is rendered by the service provider, there is no requirement to file ST-3 Returns. The ld. A.R. could not produce anything contrary to the said Circular. Besides, I find that as per Rule 7C of the Service Tax Rules, in the event, nil returns are filed, the Assessing Officer had the discretion to waive the late fees for filing the ST-3 Returns. In my view, it is a fit case to invoke the proviso to Rule 7C and waive the late fees relating to the nil returns filed by the appellant during the period April, 2005 to March, 2008. A similar view has been held by this Tribunal in the case of Amrapali Barter (P.) Ltd. v. CST [Order No.A-879-880/Kol/2012, dated 14-12-2012]. In these circumstances, the order of the ld. Commissioner (Appeals) is set aside and the appeal filed by the appellants is hereby allowed.
Appeal is allowed.
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