Recently discovered unpaid service tax

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  1. cva murthy

    cva murthy New Member

    We are a 2 person husband and wife (both fulltime directors) pvt ltd software company. Our business model is simple: We provide software coding services to foreign clients, receive remittance in $ into our current account and divide it between husband and wife, with some left for company.

    When we initially started, we consulted a CA, who advised us to use 94J to pay 10% TDS. He probably assumed that we would never cross 10 lacs/annum in revenue. Our revenue is not fixed, as it depends upon client requirements and they can decide to cancel our contract at any time. It recently came to our notice, via a new CA, that any amount over 10 lac/annum per director results in service tax liability when filing payment under 94J.

    I paid myself about 12 lacs from october 2014 to march 2015 ( 2 lacs/month approx) and 25 lacs in AY 2015-16 ( 2 lacs/month approx) using 94J and 10% TDS deduction. My wife was paid 9 lacs in 2015-16 via 94J and 10% TDS deduction. All our personal taxes are paid in full for these 2 years My new CA and some other respected senior professionals have advised us to begin using 92B from now on and ignore the past. My wife is uncomfortable with the idea because she is concerned that we may be audited in future and she is OK with paying any penalty/late fees etc as long as we are free from any hassles in future from IT dept.

    We have ST number for company. please advise if it is advisable to try and fix this oversight on our part (we were not trying to do any fancy gimmicks, we have a very simple business) and what chance of trouble we have regarding audit. If it is better to fix this now at the cost of money, we are open to that suggestion too. Thanks!
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