Service Tax Relief on ‘Light-Dues’: Key Points from Notification No. 1/2022
Simplified Explanation of Notification No. 1/2022-Service Tax
Context:
This notification pertains to the service tax on “light-dues” collected under the Lighthouse Act for a specific period.
What’s the Issue?
During the period from July 1, 2012, to June 30, 2017, there was a common practice of not charging service tax on “light-dues” collected by the Directorate General of Lighthouses and Lightships. However, these dues were technically liable for service tax under the Finance Act, 1994.
Government Decision:
The Central Government has decided that, despite the fact that service tax should have been paid according to the law, it will not be enforced for this specific period. This decision is made under certain legal provisions, ensuring that the non-payment of service tax during this time won’t be penalized.
Legal References:
- Central Excise Act, 1944, Section 11C
- Finance Act, 1994, Section 83
- Central Goods and Services Tax Act, 2017, Section 174 (2)(e)
Practical Example:
Imagine a shipping company that paid “light-dues” from July 1, 2012, to June 30, 2017, to the Directorate General of Lighthouses and Lightships. Under the usual practice of the time, they were not charged service tax on these dues. According to this notification, the shipping company will not have to pay any additional service tax for that period, even though technically it was due.