{"id":447,"date":"2011-04-20T18:13:06","date_gmt":"2011-04-20T18:13:06","guid":{"rendered":"http:\/\/www.itatonline.org\/blog\/?p=447"},"modified":"2012-07-23T11:12:16","modified_gmt":"2012-07-23T11:12:16","slug":"service-tax-on-legal-consultancy-service-ccompliance-guide","status":"publish","type":"post","link":"https:\/\/itatonline.org\/blog\/service-tax-on-legal-consultancy-service-ccompliance-guide\/","title":{"rendered":"Service-tax On \u201clegal Consultancy Service\u201d: Compliance Guide (Revised 28.04.2011)"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.itatonline.org\/info\/wp-content\/uploads\/2011\/04\/pranab_mukherjee.gif\" alt=\"\" title=\"\" width=\"150\" height=\"162\" class=\"alignleft size-full wp-image-911\" \/><\/p>\n<p><strong>Despite <a href=\"https:\/\/www.itatonline.org\/blog\/index.php\/what-me-pay-service-tax\/\">vehement protests<\/a> by the legal fraternity, service-tax on legal consultancy services has become a reality of life w.e.f 1.5.2011. The author, an eminent expert in service-tax law, has prepared this Guide to assist lawyers in complying with their newly-imposed service-tax obligation. <a href=\"https:\/\/www.itatonline.org\/blog\/index.php\/service-tax-on-legal-consultancy-service-ccompliance-guide\/#link\">A pdf copy of the Guide (revised) is available for download<\/a><\/strong>\n<\/p>\n<p>Service tax was first  introduced on Legal Consultancy Service from 01.09.2009 by the Finance (No. 2)  Act, 2009 by inserting cl. (zzzzm) in S. 65 (105) of the Finance Act, 1994. The  coverage of taxable service was limited to service provided by a business  entity to any other business entity. Further, the taxable service was  restricted to advise, consultancy or technical assistance in any branch of law,  in any manner, but not appearance before any court, tribunal or an authority.  Thus, service provided by an individual to any person and service received by  the individual from any person was not liable to tax. <\/p>\n<\/p>\n<div class=\"error\"><span class=\"style1\">This write-up is now redundant in view of changes to the law. <a href=\"https:\/\/www.itatonline.org\/info\/index.php\/guide-to-service-tax-on-advocates-from-1-07-2012-onwards\/\">Click here for the revised Guide<\/a><\/div>\n<p>The Finance Act, 2011  (enacted on 8th April, 2011) has substantially increased the  scope of the levy which is explained in this article. This amendment comes into  force from 01.05.2011. <\/p>\n<\/p>\n<p><!--more--><\/p>\n<div align=\"center\">\n<div class=\"\"><script type=\"text\/javascript\"><!--\ngoogle_ad_client = \"pub-6440093791992877\";\n\/* judgements_adsense *\/\ngoogle_ad_slot = \"0133843924\";\ngoogle_ad_width = 728;\ngoogle_ad_height = 90;\n\/\/-->\n<\/script><br \/>\n<script type=\"text\/javascript\"\nsrc=\"https:\/\/pagead2.googlesyndication.com\/pagead\/show_ads.js\">\n<\/script><\/div>\n<\/div>\n<p><strong><u>Amendments by the Finance Act, 2011 :<\/u><\/strong><\/p>\n<\/p>\n<p>The levy of service  tax from &ldquo;legal Consultancy Service&rdquo; is given hereinbelow in question &#8211; answer  form for easy understanding and better comprehension:<\/p>\n<\/p>\n<p><em><strong>Q.1. Please explain  the amendment in the taxable service of legal consultancy by the Finance Act,  2011.<\/strong><\/em><\/p>\n<\/p>\n<p>A.1. The Finance Act,  2011 has substituted sub-clause (zzzzm). The definition read as follows :<\/p>\n<\/p>\n<blockquote>\n<p>&ldquo;<em>(i)<\/em> <em>(zzzzm) (i) to any  person, by a business entity, in relation to advice, consultancy or assistance  in any branch of law, in any manner;<\/em><br \/>\n    <em>(ii) to any business entity, by any person, in relation to  representational service before any cout, tribunal or authority;<\/em><br \/>\n    <em>(iii) to any business entity, by an arbitral tribunal, in  respect of arbitration&rdquo;<\/em><\/p>\n<\/blockquote>\n<p>The scope of Legal  Consultancy Service can be derived from above definition as follows :<\/p>\n<\/p>\n<p>The taxable service  include advise, consultancy or assistance in any branch of law by a business  entity to any person. <\/p>\n<\/p>\n<p>Further, service  provided to a business entity by any person in relation to representation  before any court, tribunal or authority is also included.<\/p>\n<\/p>\n<p>Furthermore, service  provided to a business entity by an arbitral tribunal in respect of arbitration  is also included. The word &ldquo;<em>arbitration&rdquo;  and &ldquo;arbitral tribunal&rdquo;<\/em> shall have the meaning assigned to them in the  Arbitration and Conciliation Act, 1996. <\/p>\n<\/p>\n<p><em><strong>Q.2. Please explain  the extent of the service tax law. <\/strong><\/em><\/p>\n<\/p>\n<p>A.2. The service tax  is introduced by the Finance Act, 1994. It extends to whole of India except the state of Jammu &amp;  Kashmir. That means service provided by a person from Jammu &amp; Kashmir is  not liable to tax. <\/p>\n<\/p>\n<p><em><strong>Q.3. Please explain  the meaning of business entity.<\/strong><\/em><\/p>\n<\/p>\n<p>A.3. The meaning of  business entity is contained in S. 65(19b) which provides that, &ldquo;<em>business entity&rdquo; <\/em>includes an Association  of Persons, Body of Individuals, Company or Firm, but not include an  individual. <\/p>\n<\/p>\n<p>It is a mute question  whether an individual carrying business in proprietary firm is regarded as business  entity or not. The definition includes a firm but does not include an  individual. In the opinion of the writer, applying the principle of <em>noscitur a sociis,<\/em> the word, &ldquo;firm&rdquo; takes  meaning of the words, &ldquo;association of person&rdquo;, &ldquo;body of individuals&rdquo; and  &ldquo;company&rdquo; which signifies that a proprietary concern may not be regarded as  business entity. <\/p>\n<\/p>\n<p><em><strong>Q.4.  Please explain whether  individual lawyers are covered in service tax? If yes, how?<\/strong><\/em><\/p>\n<\/p>\n<p>A.4. Individual  lawyers are covered if they provide representation service to a business entity  before any court, tribunal or authority.<\/p>\n<\/p>\n<p><em><strong>Q.5. Are the  individual lawyers covered if they provide advise, consultancy or assistance in  any branch of law? <\/strong><\/em><\/p>\n<\/p>\n<p>A.5. No.<\/p>\n<\/p>\n<p><em><strong>Q.6. A business entity  providing advise, consultancy or assistance in any branch of law to an  individual is covered ?<\/strong><\/em><\/p>\n<\/p>\n<p>A.6. Yes. <\/p>\n<\/p>\n<p><em><strong>Q.7. Is an individual  lawyer providing advise, consultancy etc or representation service to an  individual, covered?<\/strong><\/em><\/p>\n<\/p>\n<p>A.7. No, service by an  individual lawyer to another individual person is not covered.<\/p>\n<\/p>\n<p><em><strong>Q.8. It seems that the  definition does not specify that the person providing Legal Consultancy Service  should be an advocate or a lawyer, holding a legal degree. Does it mean that a  firm of income tax practitioners or sales tax practitioners not having any  member holding a legal degree and providing advise, consultancy is covered  under service tax?<\/strong><\/em><\/p>\n<\/p>\n<p>A.8.&nbsp; Yes, such firms with or without persons  holding legal degree are also covered under the levy. <\/p>\n<\/p>\n<p><em><strong>Q.9. It happens in  practice that the solicitors having proprietary firms appoint individual counsels  to argue the case on behalf of its client which is a business entity in a court  of law, whether such counsels&nbsp; are  required to charge service tax to the solicitors?<\/strong><\/em><\/p>\n<\/p>\n<p>A.9. On a plain  reading of the definition it appears that service provided by an individual to  an individual is outside the ambit of the levy. However, the counsel holding  brief of the solicitor also holds authority to appear on behalf of the actual  client. The client is bound by the representation made by the counsel. In such  a case, it can be said that the counsel is providing taxable service to the  client who is a business entity. <\/p>\n<\/p>\n<p><em><strong>Q.10. In the situation  stated in Q.9, Please explain the manner of raising bill by the counsel. <\/strong><\/em><\/p>\n<\/p>\n<p>A.10. The counsel  should raise bill on the solicitor stating in the bill &ldquo;on account of _______&rdquo;  and the solicitor either reimburse the amount from the Escrow A\/c of the client  or make the client pay directly to the counsel.<\/p>\n<\/p>\n<p><em><strong>Q.11. The solicitor in  Q.9, also provide service of preparing a case, briefing the counsel and other  advisory and consultancy to the business entity. He may include the counsel&rsquo;s  bill in his charge and the client pays the total amount to the solicitor from  which he pays to the counsel. What will be the liability of the solicitor?<\/strong><\/em><\/p>\n<\/p>\n<p>A.11. The solicitor  would be liable to pay service tax on the entire amount received from the  client which includes counsel&rsquo;s bill including service tax in it. The solicitor  will get credit of payment of service tax to the counsel under Cenvat Credit  Rules and pay balance amount to the Government. <\/p>\n<\/p>\n<p>The solicitor may opt  for reimbursing the amount to the counsel and issue separate bill for his fees.  In that case, the counsel would be required to pay service tax on his bill and  the solicitor would pay service tax on his fees separately. &nbsp;<\/p>\n<\/p>\n<p><em><strong>Q.12.  Will the position be different in case of Advocate on Record and the advocate  appearing in the court?<\/strong><\/em><\/p>\n<\/p>\n<p>A.12. When the  business entity appoints some person as Advocate on Record who in turn appoint  an advocate to represent the matter before a court, the same principles in  above examples will apply.<\/p>\n<\/p>\n<p><em><strong>Q.13. A firm of Chartered  Accountant appoints an individual advocate to represent his client who is an  individual in the tribunal. Whether the advocate would be liable for service  tax?<\/strong><\/em><\/p>\n<\/p>\n<p>A.13. Upto 24.04.2011,  the practicing chartered accountants, cost accountants, company secretaries, were  exempt from service tax in relation to representation before any statutory  authority in the course of proceedings initiated under any law, for the time  being in force, by way of issue of a notice<a href=\"#_ftn1\" name=\"_ftnref1\" title=\"\" id=\"_ftnref1\"> <\/a>.  The chartered accountants etc. are now covered even in case of representation  services to an individual. However, from the discussion mentioned above, it can  be said that the advocate in fact provide service to an individual and not to  the chartered accountant firm. Therefore, an individual advocate may be  regarded as providing representation service to an individual and outside the  scope of the service. <\/p>\n<\/p>\n<p><em><strong>Q.14. Please explain  whether initial exemption of `10 Lakhs (threshold limit) is available to this service? If  yes, how the exemption works.<\/strong><\/em><\/p>\n<\/p>\n<p>A.14. The threshold  limit is provided under the Service Tax Law for small service providers. In  this context, exemption of `10 Lakhs of taxable service is available (under notification  no. 8\/2008 &ndash; ST dated 01.03.2008) to any service provider including the Legal  Consultancy Service provider. Conditions for such exemption are as follows :<\/p>\n<\/p>\n<ul>\n<li>The  exemption is based on the aggregate value of taxable service provided in the  previous financial year. For the purpose of the service being introduced first  time as a taxable service in the Statute Book, the value of taxable service in  the previous year would be regarded as nil. The service provider would be  eligible for the exemption upto the first receipt of `10 Lakhs towards the taxable service  provided. <\/li>\n<\/ul>\n<ul>\n<li>The  exemption is optional which means a taxable service provider may or may not opt  for this exemption. If the exemption is not opted, he would be required to pay  service tax from the first bill raised after the service become taxable. <\/li>\n<\/ul>\n<ul>\n<li>The  person opting for exemption would not be entitled to claim Cenvat credit of  inputs, input service and capital goods until he start paying service tax. <\/li>\n<\/ul>\n<\/p>\n<ul>\n<li>A  service provider providing service from different places will have to aggregate  the value of taxable service from all the places he is providing taxable service  for the purpose of exemption. <\/li>\n<\/ul>\n<ul>\n<li>A  service provider providing other taxable services will have to include the  turnover of receipt of all taxable services for the purpose of the exemption. <\/li>\n<\/ul>\n<ul>\n<li>The  basic exemption scheme being optional, the option once exercised is final and  cannot be revoked in the concerned financial year. <\/li>\n<\/ul>\n<ul>\n<li>The  exemption is conditional upon taxable service provided in the previous financial  year upto the basic limit. However, it is to be claimed on the receipt of  taxable service in the current year which means a taxable service provided in  the previous year, but the value received in the current year is counted twice  for the purpose of basic exemption. <\/li>\n<\/ul>\n<p><em><strong>Q.15. If the service provider has exceeded threshold exempted  value of taxable service provided, say in the F.Y. 2011-12, whether he can  avail for exemption in F.Y. 2012-13? <\/strong><\/em><\/p>\n<\/p>\n<p>A.15. No, the exemption is based on the provision of taxable  service in the previous financial year and hence only if the taxable value of  service provided in the previous financial year does not exceed the basic  exemption limit, he is eligible for the exemption again in the immediately  following year.<\/p>\n<\/p>\n<p><em><strong>Q.16. Can you explain the provisions  regarding registration under service tax?<\/strong><\/em><\/p>\n<\/p>\n<p>A.16. A person providing taxable service and opting for basic  exemption should apply for registration within 30 days of crossing the limit of  receipt of value of taxable service of `9 Lakhs. The person not opting for exemption should  obtain registration within 30 days from providing from the date of issue of first  invoice. In case of new service, the person providing such service should  obtain registration within 30 days from issue of first invoice, if he has not  opted for the basic exemption. <\/p>\n<\/p>\n<p><em><strong>Q.17. Please explain the procedure for registration.<\/strong><\/em><\/p>\n<\/p>\n<p>A.17. The procedure for applying for registration is now  online :<\/p>\n<\/p>\n<ul>\n<li>To  login on <a href=\"https:\/\/www.aces.gov.in\">www.aces.gov.in<\/a> and obtain user  name and password with email id for communication.<\/li>\n<\/ul>\n<ul>\n<li>Fill  in Form ST-1 with complete details on the website of <a href=\"https:\/\/www.aces.gov.in\">www.aces.gov.in<\/a>. A PAN based ST Code Number would  be generated.<\/li>\n<\/ul>\n<ul>\n<li>The  following documents should be attached for submission to the Jurisdictional  Officer :<\/li>\n<li>Application  in Form ST-1 in triplicate duly signed.<\/li>\n<li>Attested  copy of PAN card.<\/li>\n<li>Proof  of address of the premises which is required to be registered.<\/li>\n<li>Copy  of document governing the Constitution of organization (e.g. partnership deed  in case of partnership firm).<\/li>\n<li>Authority  Letter in favour of the person who is to collect the registration certificate  on letter head of organization applying for registration.<\/li>\n<li>Power  of Attorney in case the documents are signed by an authorized representative.<\/li>\n<li>Declaration  Form.<\/li>\n<\/ul>\n<p><em><strong>Q.18. Whether registration certificate is available online?  If yes, whether it is required to be signed by the Jurisdictional  Superintendent? In which form the registration certificate is issued?<\/strong><\/em><\/p>\n<\/p>\n<p>A.18. The registration certificate can be obtained online  after submission of above details to the Jurisdicitonal Superintendent and it  is valid. There is no requirement to get the certificate signed by the  Jurisdictional Superintendent. The registration certificate is in Form ST-2. <\/p>\n<\/p>\n<p><em><strong>Q.19. Please explain the challan by which service tax is  required to be paid.<\/strong><\/em><\/p>\n<\/p>\n<p>A.19. GAR 7 is the challan by which service tax is required  to be paid.<\/p>\n<\/p>\n<p><em><strong>Q.20. Please state the date on which payment of service tax  is required to be made?<\/strong><\/em><\/p>\n<\/p>\n<p>A.20. In case of individual and partnership firms, the  service tax payment is to be made on quarterly basis of a calendar year i.e. 5th  day of the succeeding&nbsp; month of the end  of the quarter. For example for the period April to June, service tax is to be  paid on 5th July. However, in case of quarter ending March, the  payment is required to be made on 31st March only. In case of the  service provider whose payment of service tax exceed `10 Lakh in the previous financial year,  he is required to make payment electronically by 6th day instead of  5th day of the succeeding month. <\/p>\n<\/p>\n<p><em><strong>Q.21. Whether service tax is to be paid on receipt of payment  of the taxable service provided or on issue of bills?<\/strong><\/em><\/p>\n<\/p>\n<p>A.21. Prior to introduction of Point of Taxation Rules by the  Finance Bill, 2011 the service tax was required to be paid only on receipt  basis. However, the Point of Taxation Rules were first introduced by the  Finance Bill, 2011 which required service tax to be paid on date of the provision of service or the  issue of invoice (it should be within 14 days of provision of such service) or  receipt of advance, whichever earlier.<\/p>\n<\/p>\n<p>These Point of Taxation rules were amended before passing of the bill by the Parliament to provide that Service tax is to  be paid in case of the persons providing as proprietor or partnership firm in  the field of Legal Consultancy Service, Practicing Chartered Accountants&rsquo;,  Practicing Cost Accountants&rsquo;, Practicing Company Secretary, Architect Service,  Interior Decorators&rsquo; Service and Scientist or Technocrat on receipt of payment (including  receipt of advance for service to be provided). <\/p>\n<\/p>\n<p><em><strong>Q.22. Please explain the value on which service tax is  required to be paid. <\/strong><\/em><\/p>\n<\/p>\n<p>A.22. S. 67 of the Finance Act, 1994 provides that service  tax is required to be paid on gross amount charged by the service provider for  such service provided or to be provided. The gross amount charged for the  taxable service includes any amount received towards the taxable service,  before, during or after provision of such service. <\/p>\n<\/p>\n<p>In case of free service, no service tax is chargeable.  However, in case whether provision of service is for a consideration which is  not ascertainable, the amount will be determined as per the Service Tax  (Valuation) Rules, 2006. <\/p>\n<\/p>\n<p>Where the gross amount charged by a service provider, for the  service provided or to be provided is inclusive of service tax payable, the  value of such taxable service shall be such amount as, with the addition of tax  payable, is equal to the gross amount charged (i.e. to be computed on the  reverse formula basis, as if the tax is included in the gross amount received). <\/p>\n<\/p>\n<p>In case of service to Associated Enterprise (to be determined  as per S. 92A of the Income Tax Act) any book adjustment by which the amount is  debited or credited, as the case may be, to any account, whether called  &ldquo;Suspense Account&rdquo; or by any other name, in the books of account of service  provider (i.e. on accrual basis).<\/p>\n<\/p>\n<p>Service tax is also payable on reimbursement of expense such  as travelling, boarding and lodging, conveyance etc, incurred during the course  of providing service. Certain exclusions are provided in Service Tax (Valuation)  Rules, 2006 in relation to expenses incurred as &ldquo;<em>pure agent<\/em>&rdquo;. This exclusion <em>interalia<\/em> relates to expense incurred during the course of providing service, subject to  eight conditions prescribed therein which have to be satisfied simultaneously.  Some of these conditions are that recipient of service should receive and&nbsp; use such services procured by the service  provider, authority to service provider to make the payment on his behalf and&nbsp; reimbursement of actual amount incurred.<br \/>\n  &nbsp;<br \/>\n  <em><strong>Q.23. An advocate provides service to a Non-resident. Whether  he will be liable to pay tax, if the payment is received in Convertible Foreign  Exchange?<\/strong><\/em><\/p>\n<\/p>\n<p>A.23. The Legal Consultancy Service falls in recipient base  criteria. If the person who receive this service is located outside India at the time of rendering the  service, the advocate would be entitled for the benefit of export of service as  per the Export of Service Rules, 2006 if the payment is received in Convertible  Foreign Exchange. The Point of Taxation Rules have now provided that such  person would be liable to pay tax if the payment is not realized in Convertible  Foreign Exchange within the time specified by the Reserve Bank of India.<\/p>\n<\/p>\n<p><em><strong>Q.24. Please explain the provisions as regards to filing of  service tax returns.<\/strong><\/em><\/p>\n<\/p>\n<p>A.24. Half yearly service tax returns are to be filed in form  ST-3 within 25 days from the end of half year of a calendar year, i.e. by 25th  October for the half year ending April to September and 25th of  April for half year ending October to March. <\/p>\n<\/p>\n<p><em><strong>Q.25. What are the records required to be maintained?<\/strong><\/em><\/p>\n<\/p>\n<p>A.25. The following records are required to be maintained by  a service provider under Rule 4A of Service Tax Rules, 1994 :<\/p>\n<\/p>\n<ul>\n<li>No  specific records are prescribed under the rules. The records maintained by the  service provider in accordance with other laws are acceptable. They may be  manual or computerized. However, it is required that the service provider  should furnish a list of the records maintained with the first return. <\/li>\n<\/ul>\n<ul>\n<li>Every  person providing taxable service is required to issue an invoice\/bill\/challan  signed by such person or a person authorized by him. Such invoice\/bill\/challan  shall be serially numbered and contain the following details :<\/li>\n<li>Name,  Address &amp; Registration Number of Service Provider.<\/li>\n<li>Name  &amp; Address of Service Receiver.<\/li>\n<li>Description,  Classification and Value of Taxable Service<\/li>\n<li>Service  Tax Payable<\/li>\n<\/ul>\n<ul>\n<li>Non-maintenance  of proper records and non-issue of invoice after completion of service within  14 days may entail the penalty of `10,000\/. Also the concealment penalty of 100% of tax  payable is applicable if the invoices are not issued within 14 days or it is  not entered into the books of account (from the notified date upon enactment of  Finance Act, 2011). <\/li>\n<\/ul>\n<p><em><strong>Q.26. What is the rate of interest on late payment of service  tax?<\/strong><\/em><\/p>\n<\/p>\n<p>A.26. 18% per annum, from the date of enactment of Finance  Act, 2011 based on number of days of delay. Prior to this, the rate of interest  was 13% per annum. The rate of interest is reduced to 15% in case of small  service providers, whose turnover of taxable service does not exceed `60 lakhs in the financial year  covered by Show Cause Notice or the last financial year.<\/p>\n<\/p>\n<p><em><strong>Q.27. Whether Cenvat credit can be availed by the service  provider? <\/strong><\/em><\/p>\n<\/p>\n<p>A.27. Yes, in accordance with the amended Cenvat Credit  Rules, 2004. From 01.04.2011, Cenvat credit can be availed on input service,  inputs or capital goods anytime on or after receipt of invoice\/bill or challan by  the service provider. Such invoice etc. should be in conformity of the  requirement of Rule 4A of Service Tax Rules, 1994 as discussed above. If the  service provider fails to make payment within 90 days of the date of the  invoice, he will be required to pay service tax equivalent to the Cenvat credit  availed alongwith the interest.<\/p>\n<\/p>\n<p><em><strong>Q.28. Please explain availment of Cenvat credit in case of  Legal Consultancy Service.<\/strong><\/em><\/p>\n<p>A.28. Availment and utilization of Cenvat credit is governed by Cenvat Credit  Rules, 2004. These rules are amended substantially from 01.04.2011<a href=\"#_ftn4\" name=\"_ftnref4\" title=\"\" id=\"_ftnref4\"> <\/a>.  An output service provider is eligible to avail the credit of following duties  or taxes paid for the purpose of providing output taxable service. <\/p>\n<ul>\n<li>Excise  duty on inputs<\/li>\n<li>Service  Tax on input services (such as, i) service tax paid to another Legal Service  Provider or a chartered accountant, etc. which may be regarded as identified  input service against taxable output service, ii) common services like  telephone, chartered accountants etc)<\/li>\n<li>Excise  Duty on capital goods like air-conditioner, computers etc<\/li>\n<\/ul>\n<p>A Legal  Consultancy Service provider who provides only taxable services, will be  entitled to avail full credit of tax or duty paid as stated above. However, if such  service provider also provides non-taxable service like representation service  to an individual, he will be entitled only proportionate credit of common  services in the ratio of taxable service provided to all taxable and  non-taxable service. However, such service provider will be eligible to avail  full credit of input service availed directly for providing taxable output  service (like another Legal Service Provider). The credit may be taken as  stated in answer to Q.27.<\/p>\n<\/p>\n<p>Further,  once the credit availed, it can be utilized any time for the purpose of payment  of service tax. No time limit is prescribed for availment or utilization of Cenvat  credit. <\/p>\n<\/p>\n<p><em><strong>Q.29. Please  explain the penalty, prosecution or other garnishing provisions.<\/strong><\/em><\/p>\n<\/p>\n<p>A.29. Yes,  the penalties are as follows :<\/p>\n<\/p>\n<ul>\n<li><strong>Late fees for delay in filing of  returns (S. 70 r.w. Rule 7C) &ndash;<\/strong><\/li>\n<\/ul>\n<p>`500\/-  for first 15 days <br \/>\n  `1,000\/-  for 16 to 30 days <br \/>\n  `100\/-  per day beyond 30 days, maximum upto `20,000\/- <\/p>\n<\/p>\n<ul>\n<li><strong>Penalty for delay in payment of tax  (S. 76) &ndash;<\/strong><\/li>\n<\/ul>\n<p>1% per  month or `100\/-  per day, whichever is higher, maximum penalty upto 50% of the tax demanded<\/p>\n<\/p>\n<ul>\n<li><strong>General Penalty&nbsp; (S. 77) &ndash;<\/strong><\/li>\n<\/ul>\n<p>`10,000\/-  for any contravention of any provision of &nbsp;the Act or Rules for which no penalty is  prescribed<\/p>\n<\/p>\n<ul>\n<li><strong>Penalty for suppression of value of  taxable service (S. 78) <\/strong>&ndash;<\/li>\n<\/ul>\n<p>100% of tax  evaded or short paid ;<br \/>\n  50% of tax,  if true and complete details of transactions are captured in specified records  or 25% of tax, if the tax alongwith interest is paid within 30 days from the  date of communication of the order (the period of 30 days extended to 90 days  in case of small service providers whose value of taxable service does not  exist `60 lakhs during during the financial  year covered by the Show Cause Notice or during the last preceeding financial  year). <\/p>\n<\/p>\n<ul>\n<li>If  penalty u\/s. 78 is imposable, no penalty u\/s. 76 would be levied<\/li>\n<\/ul>\n<ul>\n<li>Waiver  of penalty u\/s. 78 is available in specified circumstance, in case where the  assessee has captured true and complete details of transactions in specified  records subject to establishing reasonable cause for failure to make payment of  service tax. <\/li>\n<\/ul>\n<ul>\n<li>Other  garnishing provisions are made applicable as regards to power to search  premises, first charge on the property of defaulters (subject to some other  charges) and prosecution for offences.<\/li>\n<\/ul>\n<p>Author: <strong>CA Rajkamal Shah<\/strong>\n<\/p>\n<div id=\"ftn4\">\n<p><a href=\"#_ftnref4\" name=\"_ftn4\" title=\"\" id=\"_ftn4\"> <\/a>\n    <\/div>\n<div align=\"center\">\n<div class=\"\"><script type=\"text\/javascript\"><!--\ngoogle_ad_client = \"pub-6440093791992877\";\n\/* judgements_adsense *\/\ngoogle_ad_slot = \"0133843924\";\ngoogle_ad_width = 728;\ngoogle_ad_height = 90;\n\/\/-->\n<\/script><br \/>\n<script type=\"text\/javascript\"\nsrc=\"https:\/\/pagead2.googlesyndication.com\/pagead\/show_ads.js\">\n<\/script><\/div>\n<\/div>\n<p><a name=\"link\" id=\"link\"><\/a><\/p>\n<div class=\"journal2\">\n[download id=&#8221;3&#8243;]\n<\/div>\n<\/p>\n<div class=\"journal3\">\nSee Also <strong><a href=\"https:\/\/www.itatonline.org\/blog\/index.php\/what-me-pay-service-tax\/\">What, Me Pay Service Tax?<\/a><\/strong> by <strong>Dr. K. Shivaram<\/strong>\n<\/div><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Despite vehement protests by the legal fraternity, service-tax on legal consultancy services has become a reality. The author, an eminent expert in service-tax law, has prepared this Guide to bail out bewildered lawyers wondering how to comply with their newly-imposed service-tax obligation. A pdf copy of the Guide is available for download<\/p>\n<div class=\"read-more\"><a href=\"https:\/\/itatonline.org\/blog\/service-tax-on-legal-consultancy-service-ccompliance-guide\/\">Read more &#8250;<\/a><\/div>\n<p><!-- end of .read-more --><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[5],"tags":[],"class_list":["post-447","post","type-post","status-publish","format-standard","hentry","category-legislation"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/blog\/wp-json\/wp\/v2\/posts\/447","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/blog\/wp-json\/wp\/v2\/comments?post=447"}],"version-history":[{"count":0,"href":"https:\/\/itatonline.org\/blog\/wp-json\/wp\/v2\/posts\/447\/revisions"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/blog\/wp-json\/wp\/v2\/media?parent=447"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/blog\/wp-json\/wp\/v2\/categories?post=447"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/blog\/wp-json\/wp\/v2\/tags?post=447"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}