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Do your due diligence before sending show cause notices on service tax defaults: CBIC tells officers

Tax-related associations say the department has issued notices even to many businesses which are exempt from service tax for the year 2015-16. Experts say that not all differences in data between income tax and service tax amount to tax evasion.

May 06, 2021 / 05:52 PM IST

The Central Board of Indirect Taxes and Customs (CBIC) has directed its offices to not send show-cause notices (SCNs) for service tax defaults, merely on the basis of discrepancies between income tax returns and service tax amount.

Various tax-related associations have complained to the Union finance ministry that SCNs were wrongly sent for the financial year 2015-16.

The GST department has also issued notices to many entities and professionals who are exempted from service tax, like doctors, they had complained.

The GST department can issue SCNs till December 31 for any service tax violation in 2015-16. The department can reopen the last five years’ cases.