Comparison of post and pre budget penalty provisions in service tax

 The pre and post budget penalty provisions are listed below for ease of comparison:

Particulars of the section	Pre budget provision	Post budget provision
Section 76 Penalty for failure to pay service tax	Provision details:       Applicable on non-payment or delayed payment       Not mandatory, can be waived if reasonable cause shown.       Application has to be made to excise authority for waiver.       Unwaived order becomes appealable order.	Provision details:When service tax is less paid, short levied, not levied, not paid, short paid or erroneously refunded, for reason other than:       Fraud       Collusion       Wilful misstatement       Suppression of facts       Contravention of any of the provisions of the Act with an intent to evade service tax, Penalty is payable along with service tax and interest under section 73.
	Penalty shall be: ·  Rs 100 per day during which such failure continues or ·  1% of the service tax per month (whichever is higher) Subject to 50% of the service tax payable.	Penalty shall be : ·   10% of the service tax Wherein the penalty shall be reduced in case the service tax and interest is paid within : ·   30 days from the date of show cause notice received à no penalty ·   30 days from the date of order  received à 25% penalty imposed in the order (reduced penalty amount shall be paid along with the service tax and interest)
Section 77 Penalty for contravention of rules and provisions of the Act for which no penalty is specified elsewhere	Provision details: Penalty is levied in case of following contravention of rules and provisions of the section:       Not obtaining registration       Non maintenance of books and accounts       Failure to pay tax electronically       Issuing incorrect invoice       Non-accounting of invoices in books of accounts       Other contraventions not covered under any other rules and provisions of the Act       Not furnishing information required       Non-appearance before officers on issue of summons       Not producing documents before Central Excise officer in accordance with the provisions of the Act.
	Penalty shall be: ·   Rs.10000 in all cases except in last three points. ·   Rs. 10000 or Rs.200 per day till the date the failure continues, whichever is higher.	Penalty shall be: ·   Rs.10000 in all cases except in last three points. ·   Rs. 10000 or Rs.200 per day till the date the failure continues, whichever is higher.
Section 78 Penalty for suppressing value of taxable service	Provision details: When service tax is less paid, short levied, not levied, not paid, short paid or erroneously refunded, by reason of:       Fraud       Collusion       Wilful misstatement       Suppression of facts       Contravention of any of the provisions of the Act with an intent to evade service tax, Penalty is payable along with service tax and interest under section 73.
	Penalty shall be: ·  100% of the service tax Wherein the penalty shall be reduced to : ·  50% of service tax, if true and complete details of the transactions are available in the specified records ·  25% of service tax, in case the above condition is fulfilled and the service tax, interest and reduced penalty amount is paid within 30 days from the date of order received	Penalty shall be : ·   100% of the service tax Wherein the penalty shall be reduced in case the service tax, interest and reduced penalty amount is also paid within : ·   30 days from the date of show cause notice received à 15% of the service tax ·   30 days from the date of order  received à 25% of the service tax
Section 78A Penalty for offences by director, etc. of company	Provision details: Penalty levied on director/manager/secretary or other officer of such company responsible for the conduct of the business and was knowingly concerned  for the following offences:       Evasion of service tax       Issuance of bill/invoice/challan for non-taxable services       Availment or utilisation of credit of taxes or duty without actual receipt of services either in partial or fully       Failure to pay tax to department for more than 6 months
	Penalty shall be: ·   Uptorupees one lakh. ·   Onus to prove guilty mind of the person is on department	Penalty shall be: ·   Uptorupees one lakh. ·   Onus to prove guilty mind of the person is on department
Section 78B Transitory provisions (New provision)	-------N.A.-------	Before the budget gets assent of the President: ·   In Case no notice is served under 73(1) or notice is served but order not issued under 73(2), then erstwhile section 76 and 78 applies. ·   In case no notice is served under 73(1) or notice is served but order not issued under 73(2) for cases covered under 73(4A), the penalty leviable shall not exceed 50% of service tax.

Notes:

      Nopenalty is charged under section 76 in case penalty is charged under section 78.

      No penalty in case service tax and interest paid before issue of Show cause Notice.

      Post budget, section 80 stands deleted which provided for waiver of penalty under section 76 in case reasonable cause shown.

      The budget is not yet passed and hence, these provisions shall be effective post enactment of the ‘The Finance Bill, 2015’.