#Penalty Waiver

CESTAT New Delhi rules that failure to pay the SVLDRS-3 amount within the stipulated deadline forfeits the scheme’s benefit, but waives penalties when the delay is directly attributable to pandemic-related banking disruptions. This sets a critical precedent for legacy tax litigants facing similar force majeure challenges, affirming that statutory deadlines are not absolute when external crises impede compliance.

CESTAT Hyderabad has ruled that service tax must be calculated on the gross amount received by the service provider, inclusive of tax, and that TDS deducted by clients cannot form part of the taxable base. This clarifies a critical compliance point for professionals in architecture, engineering, and project management, ensuring they are not penalized for tax deductions made by their clients under income tax rules.

CESTAT Hyderabad ruled that voluntary payment of service tax and interest before issuance of a Show Cause Notice (SCN), coupled with a bonafide belief and no suppression of facts, invalidates penalties under Sections 78 and 77 of the Finance Act. The decision reinforces the principle that proactive compliance can shield taxpayers from punitive measures, offering relief to businesses under the Reverse Charge Mechanism.

CESTAT rules that pre-SCN payment of service tax, interest, and 15% penalty under Section 78's second proviso conclusively terminates proceedings, shielding assessees from further demand or penalties. The ruling reinforces voluntary compliance as a complete defense, impacting tax dispute resolution strategies for service providers.

CESTAT Hyderabad holds that service tax cannot be levied on trade discounts and penalty is unsustainable where non-payment stems from legal ambiguity, not deliberate evasion.