Settlement commission under service tax
As per finance act, 1994, with effect from 28/05/2012 provision for settlement commission in section 31, 32,32A to 32P of central excise act ,1944 governing settlement mechanism in central excise has been made applicable to service tax by virtue of section 83.
Settlement commission is another alternative channel for resolution of dispute for assessee without going into prolonged litigation in adjudication / appeal/ revision.
Any assessee can approach the settlement commission on whom show cause notice has been issued and case is pending before the adjudicating authority. And amount involved should be more than Rs. 3 lakh.
And assessee means person liable to pay tax and includes his agent.
Conditions to be fulfilled for application to settlement commission
- Application for settlement commission can be filed only if the case is pending before adjudicating authority on the date of application.
- Application to settlement commission shall contain a full and true disclosure of applicant’s tax liability which has not disclosed before the department.
- If any assessee or applicant has not filed returns showing service provided and service tax paid in prescribed manner then application for settlement commission cannot be entertained for that period.
- Applicant has to pay the additional amount of service tax accepted by him along with interest which is due under the service tax.
- Case for which settlement application is filed should not be pending with appellate tribunal or court.
- Cases which involve issues of interpretation of the classification of services shall not be entertained under settlement commission.
- Application for settlement can be made by assessee only after expiry of 180 days of seizure made by department.
Objectives of settlement commission
- Quick settlement of disputes to avoid lengthy and complex litigation procedure,
- Any default assessee can admit his liability in respect to taxes and pay taxes with interest.
- Settlement commission can grant waiver/ reduction of penalty, fine or interest.
- Settlement commission can grant immunity from prosecution to assessee.