service tax
prasad
(Querist) 19 November 2009
This query is : Resolved
A partnership was entered into orally and they started as franchisees for a reputed Beauty chain.They have also collected service tax for the last 5 months but not paid it.Now a formal partnershipdeed is being executed& susequently pan & ST No will be obtained.
Now , are they supposed to pay the entire service tax collected alongwith interest, penalty for late payment,fees for late registration &fees for late filing of return. Or are they supposed to deposit the amount collected prior to the date of registration of deed under Section 73A (amt wronfully collected)collected)& apply for registration with effect from the date of execution of deed.For the purpose of service tax act,does a partnership come into existence only on execution of the deed.
Remember, the threshold limit of 10Lakhs does not apply since taxable services are being provided under the brand name of another person & hence the are liable to collect service tax right from the commencement of the business.
Hence for ST purposes When has the business actually commenced.? Pls guide me.
Raj Kumar Makkad
(Expert) 19 November 2009
There is no need of formal deed of partnership and its business shall deem started with effect from the actual date of its operation so tax collected should be got deposited under section 73A to avoid further complications and dont wait for PAN etc.
A V Vishal
(Expert) 19 November 2009
Section 73 (1A) has been provided for conclusion of adjudication proceedings in respect of a person who has voluntarily deposited the service tax demanded along with interest and penalty equal to 25 per cent. of the service tax specified in the demand notice .
Provision has been made for voluntary payment by an assessee of any amount collected in excess of the service tax leviable but not deposited with the Central Government or recovery of such
excess amount. It may be noted that any amount collected as service tax, whether or not legally required to be paid, is to be deposited with the Government under this Section. This section has been made applicable not only to a person liable to pay service tax but also to any person, even if he is not an assessee;
Section 73 A has been inserted to provide for payment or recovery of any amount representing service tax, that has been collected by a person but not deposited with the Central Government.
Section 73 B enables the Central Government to collect interest on the amount referred to in section 73A;
Section 73 C provides for provisional attachment of property by the Central Excise Officer during the pendency of any proceedings under section 73 or section 73A;
Section 73 D provides for publishing the name of any person and particulars of any proceedings in relation to such person, in public interest..
The section 76 provides for imposition of penalty for failure to pay service tax by the due date.
The penalty for delayed payment has also been linked to the amount due.
