By TIOL News Service

NEW DELHI, JULY 15, 2016 : THE Petitioner applied under the ST VCES, 2013 and declared a service tax liability of Rs.10,95,191/-. They deposited 50% of the said amount on 30/31 December 2013 and the remaining 50%was deposited on 30th June 2014.

On 26th December 2014, the Petitioner received a communication from the Respondent stating therein that their application under the VCES has been rejected. The reason - the Petitioner had calculated and deposited service tax @ 10.3% whereas the tax had to be calculated @ 12.36%. In other words, the Petitioner had to pay Rs.1,080/- in addition to what he had already deposited.

Aggrieved, the petitioner is before the Delhi High Court and submits that the actual shortfall in the deposit of service tax does not work out to even 0.1% and applying the de minimis principle, the lapse of the Petitioner should be overlooked.

The High Court, inter alia , observed -

++ The Petitioner does not dispute that on the date of raising the invoice for rendering services, the rate of tax stood revised to 12.36%.

++ It was not obligatory for the Respondent to inform the Petitioner what the correct rate of service tax was. It was for the Petitioner to have ascertained the correct rate of tax and calculated the service tax liability accordingly.

++ There is no provision in the VCES which permits correction of errors of this nature by the Petitioner.

Holding that there is no legal error committed by the Respondent in rejecting the application of the Petitioner under the VCES, the Petition was dismissed.

In passing: Also see 2016-TIOL-1358-HC-KER-ST & 2014-TIOL-471-HC-DEL-ST.

(See 2016-TIOL-1382-HC-DEL-ST )