E payment of Service Tax – no penalty please
Rs 50 lakhs limit includes payment from cenvat credit.
Today DDT would like to offer a bouquet of the most fragrant flowers to the CBEC. We had raised several questions on the mandatory e payment and even conducted quick survey in the major cities, to give the Board the quickest feed back possible. We had also raised a question whether the limit of Rs. 50 Lakhs was for cash payment only or whether it includes payment from cenvat credit too.
We are extremely grateful that Board has come up with proper clarifications and even advised the field not to initiate penal action against the assessees for not making e payments. However the Board has made it clear that e payment is here to stay and the assessees are cautioned to expeditiously complete the procedural formalities for availing internet banking facility from designated banks and comply with the requirement of mandatory e-payment.
Board has clarified that for calculating the amount of Rs. 50 Lakhs limit,
++ For a Service provider having different registrations for different premises, the limit will be computed for each registration separately.
++ Similar is the situation in the case of a person paying service tax on taxable service received by him.
++ In case of LTUs, the cumulative Service Tax paid by all the registered premises will be taken into consideration.
++ For a person who pays Service Tax as a service provider and service receiver, both the payments are to be considered.
++ Both cash payment and cenvat credit payment should be taken into consideration for calculating the amount of Rs. 50 Lakhs.
Circular No. Dated, the 6th November, 2006