As per the new service tax guidelines service provider has to raise invoice within 14 days of the completion of the service or else the CEO of the companies will be held liable for legal prosecution.
Chief executives of companies in the services sector can face prosecution if their firms fail to raise invoices on time.The government has issued detailed norms for prosecution of service tax offenders,which overhauls the supervision system in the sector.Prosecution provisions have been brought in only after service tax has stabilised and as a precursor to goods and services tax, said a tax department official.As per service tax laws,a service provider must issue an invoice within 14 days of the completion of the taxable service.The prosecution procedures are modeled on those for goods taxation.Absence of clear directions on prosecution was an area of concern.
The Central Board of Excise and Customs,the countrys apex indirect taxes body,has given directions to its field officials through a circular.The government had introduced the concept of prosecution under service tax laws nearly 17 years after the tax was introduced.However,the intent is not to harass taxpayers.Provisions relating to prosecution are to be exercised with due diligence,caution and responsibility after carefully weighing all the facts on record.Prosecution should not be launched merely on matters of technicalities, the circular says.
There could be issues of interpretation involved in determining what constitutes ‘completion of service’,as sometimes service providers have to delay an invoice on a customer’s request or other commercial reasons.A limit of.10 lakh has been set for launch of prosecution,which will not apply in the case of repeat offenders.
