FREQUENTLY ASKED QUESTIONS ON SERVICE TAX AND THEIR ANSWERS
1) GENERAL:-
Q.1.1) What is Service Tax? Is it an indirect tax ?
Ans :- Service Tax is an indirect tax levy imposed under Chapter v of the Finance Act, 1994 as amended. The tax is applicable to services specified in the Section 65 & 66”.
Q.1.2) What is the rate of Service Tax?
Ans:- At present the rate of Service Tax is eight percent to be levied on the “value of taxable service”. Generally speaking “value of taxable service” means the gross amount received by the service provider for the taxable service rendered by him.
Q.1.3) Who is liable to pay Service Tax to the Govt.?
Ans:- The person who provides the taxable service on receipt of charges is responsible for paying the Service tax to the Government.
Q.1.4) Who is liable to pay Service Tax in case service is provided by a person other than Indian resident or who does not have any establishment in India?
Ans:- In this case the services receiver in India is liable to pay Service Tax.
REGISTRATION :-
Q.2.1) Whom & where should one approach for registration?
Ans:- Generally, all Commissionerates of Central Excise, have a Service Tax Cell, headed by Assistant Commissioner/Deputy Commissioner. However, in certain Commissionerates, separate Service Tax Divisions have been constituted. The work is also delegated to Central Excise Divisions in many Commissionerates. A prospective assessee of Service Tax can approach the Assistant Commissioner/Deputy Commissioner in charge of Service Tax cell of the jurisdictional Commissionerates or Central Excise Division for registration depending upon the arrangements made in the Commissionerates.
Q2.2.) What is the procedure for registration?
Ans:- A prospective taxable service provider seeking registration should file an application in Form ST-1(in duplicate) before the jurisdictional Central Excise officer/Service Tax officer within thirty days from the date of notification of the taxable service. Department is required to issue the registration certificate within 7 days of the receipt of the application. In case of failure to issue registration certificate within 7 days, the registration applied for is deemed to have been granted and the assesee can carry on with his activities.
Q.2.3) Who should apply for registration under Service Tax law? Is there any provision for Centralised Registration?
Ans: All persons providing taxable services are required to register with the Central Excise department. They would have to take only one registration even if they operate from more than one premise but have centralised billing at one place. However, if such persons do not have Centralised billing at one place, then they will have to register at each place separately. Besides, only one registration is required to be taken even if an individual provides more than one service but from the same premises.
Q.2.4) What is to be done with the registration when
a) a registered assessee transfers his business to another person, or
b) a registered assessee ceases to carry on the activity for which he is registered?
Ans:- a) When a registered assessee transfers his business to another person the transferee should obtain a fresh certificate of registration.
b) When a registered assessee ceases to carry on the service activity for which he is registered, he should surrender his registration certificate to the Central Excise authorities.
Q.2.5) What is that time limit within which the Service provider should register with the Central Excise department for the service tax purpose once the service is notified or once the assessee commences the business of rendering the taxable service?
Ans:- Every person liable to pay the service tax should make an application to the concerned Central Excise officer for registration within a period of 30 days of the Service tax having come into force. In cases where a person commences the business of providing a taxable service after such service has been notified, he is required to make an application for registration within a period of 30 days from the date of commencement of his activities.
Q.2.6) Whether a service provider can make payment of service tax and file returns before the grant of registration by the proper officer?
Ans :- Yes. A service provider can pay service tax and file returns immediately after applying for registration.
Q2.7) Is there any penal provision for non-registration?
Ans :- Yes. Any offence of failure of non-registration will attract a mandatory penalty of rupees five hundred.
Q2.8) Is obtaining a PAN No. from Income Tax Department a must for obtaining Service Tax Registration?
Ans:- It is not mandatory to have a PAN for obtaining registration in Service Tax. However, it is advisable for Service tax assessees to have a PAN No. as Service Tax Code (STC) Number based on PAN allotted by Income tax department has been introduced in Service Tax also. The main objective of allocating a number is to identify the concerned person where he is located and registered.
3) PAYMENT OF SERVICE TAX :-
Q.3.1) How and where to pay Service Tax?
Ans:- The Service Tax amount is required to be paid in Form TR-6 Challan (yellow in colour) in the specified branches of designated banks. The list of such Banks and Branches is available in every Commissionerate of Central Excise. Different heads of accounts have been specified for different taxable service by the Govt. under which payment has to be made. While making the payment of service tax to the credit of Central Govt., head of account should be correctly and properly indicated under major and minor heads and sub-heads to avoid misclassification.
Q.3.2.) When is Service Tax required to be paid?
ns:- If the assessee is an individual or a proprietary or partnership firm, the Service tax is to be paid on quarterly basis. The payment is to be made by the 25th day of the month following the quarter. For example, Service Tax for the quarter ending 30th June is to be paid by 25th July.
In respect of other categories, the tax is payable on monthly basis and is to be paid by 25th day of the succeeding month.
Q3.3.) Whether the payment of Service tax is to be made for the billed amount or for the value received?
Ans:- The Service Tax for a particular period is payable on the value of taxable service received in that period and not on the gross amount billed to the client.
Q.3.4) Whether Service tax deposited by the assessees in non-designated bank will amount to non-payment of Service Tax?
Ans:- Yes. For payment of service tax, specific Bank has been nominated for every Central Excise Commissionerate. If Service Tax amount is deposited in a branch of Bank other than nominated Bank, it amounts to non-payment of Service Tax.
Q.3.5) What is the date of payment of Service Tax? Is it the date on which the cheque for the same is deposited/tendered in the designated Bank or the date on which the amount is credited?
Ans:- The date of deposit of cheque is the date of payment of Service Tax. The Service Tax Rules as amended provide that it would suffice if the cheque is presented to the bank by the 25th of the month. However, if the cheque bounces, it would mean as if the tax has not been paid and the necessary penal consequences would follow.
Q.3.6) How do you describe the expression “person” appearing in the definition of taxable service?
Ans:- The expression refers to a “legal person” and would include any individual, proprietary firm or partnership firm, company, trust, institution and society etc.
Q.3.7) Would services provided in India for the foreign client be liable for payment of Service tax?
Ans:- Yes, the service tax is payable on all taxable services rendered in India, whether to an Indian or foreign client
Q3.8) Would the service provided abroad liable for payment of service tax?
Ans:- No, the services rendered abroad shall not attract service tax as the levy covers only the services provided within India.
Q.3.9) When payment is made by a client or customer to an assessee after deducting his Income tax liability under “Tax Deducted at source” provision, whether the service tax liability of the assessees is only towards the amount actually received from his client or customer or tax is to be paid on the amount of income tax deducted at source also?
Ans:- The Service tax is to be paid on the value of taxable services which is charged by an assessee. Any income tax deduced at source is included in the charged amount. Therefore, Service tax is to be paid on the amount of income tax deducted at source also.
Q.3.10) What is the interest rate applicable on delayed payment of Service Tax?
Ans:- Every person, liable to pay the tax in accordance with the provisions of Section 68 or rules made thereunder, who fails to credit the tax or any part thereof to the account of the Central Government within the period prescribed, shall pay simple interest at the rate of fifteen percent per annum for the period by which such crediting of the tax or any part thereof is delayed.
Q.3.11) Is the amount for Service Tax charged from the client compulsorily to be indicated separately in the Bills/Invoices raised on him?
Ans:- Yes it is compulsory to separately indicate the amount of Service tax charged in the Bills/Invoices raised on clients in terms of Section 83 of Finance Act, 1994 read with Sec.12A of Central Excise Act, 1944. It is also advisable for the service providers to separately bill the amount of Service tax in the invoice/bill on the basis of taxable value of service rendered, especially so if he requires to avail the input credit scheme.
Q.3.12) Is there any exemption for payment of Service Tax if the receiver/provider of the service is the Central Govt./State Govt. organisation and/or Public Sector undertaking? Can any one of the above claim immunity from the liability to pay or make provision for paying the Service tax?
Ans:- No, there is no such general exemption, exempting the services received/provided by the Central Government/State Government organisation or Public Sector Undertakings. Non one can claim immunity from payment of service tax until specifically provided in law.
Q.3.13) Whether any general exemption from Service tax is available for small scale service providers, as in the central excise?
Ans:- No. At present there is no such general exemption available for small scale service providers.
Q3.14) What are the penal provisions if the service tax is not paid?paid late?
Ans:- Any person liable to pay service tax in accordance with the provisions of Section 68 or the rules made thereunder, who fails to pay such tax shall pay in addition to paying such tax, and interest on that tax in accordance with the provisions of Section 75, a penalty which shall not be less than one hundred rupees but which may extend to two hundred rupees for every day during which such failure continues, so, however, that the penalty under this clause shall not exceed the amount of service tax that he failed to pay?
Q.3.15) Can any adjustment of tax liability be made by an assessee on his own in cases where Service tax has been paid in excess?
Ans:- Yes. As per Rule 6(3)”where an assessee has paid to the credit of Central Government service tax in respect of a taxable service, which is not so provided by him either wholly or partially for any reason, the assessee may adjust the excess service tax so paid by him(calculated on a pro-rata basis) against his service tax liability for the subsequent period, if the assessee has refunded the value of taxable service and the service tax thereon to the person from whom it was received”. In all other cases of excess payment, the refund claims have to be filed with the department.
4. FILING OF RETURNS:-
Q.4.1) How to file Service Tax Returns on what interval and with whom?
Ans:- The Service Tax assessees are required to file a half yearly return in Form ST-3 or ST-3A as applicable in duplicate, to the Superintendent, Central Excise, dealing with Service Tax work. The return is to be filed within 25 days from the last day of the half year it relates to and should be accompanied by copies of all TR-6 Challans issued in the relevant period. Thus, returns for half year ending 30th September and 31st March are required to be filed by 25th October and 25th April, respectively.
Q.4.2.) What is e-filing of Service Tax returns?
Ans:- E-filing is a facility for the electronic filing of Service tax returns by assesee from his office, residence or any other place of choice, through the Internet, by using a computer. The assessee can go to the e-filing site “Home page” by typing the address http://servicetaxefiling.nic.in in the address bar of the browser.
Q4.3) Who can e-file their returns?
Ans:- Any Assesses having a 15 digit STP code can avail of the facility of electronic filing of their “Return”.
Circular number 71/1/2004-ST dated 2/1/04 may be seen for full details at http://www.servicetax.gov.in/servicetax/st-cirmainpg.htm
The assessee should take care to ensure that he has been indicating his 15 digit STP code in the challans used by him from September 2002. An assessee who has not done this may also opt for e filing but he will have to submit copies of challans manually to the department after e filing his return, evidencing payment of duties, after indicating his 15 digit STP code on each challan.
Q.4.4) What is the procedure for e-filing?
Ans: Those assesses who have 15 digit Service Tax Payer Code allotted to them, should file an application to their jurisdictional AC/DC as laid out in Trade Notice insured in this regard. They should mention a trusted e-mail address in their application, so that the department can send them their username and password to help them file their return. They should long on to the Service Tax E-filing Home page using the Internet. On entering their STP code, user word and password in the place provided on the Home page they will be permitted access to the E filing facility. They should then follow the instructions given therein..
Q.4.5) What is to be done when no services are provided for in a half-year?
Ans:- If no service have been provided during a half year no Service Tax payable; the assessee may file a Nil Return within the prescribed time limit.
Q.4.6) What is the penalty for non-filing or delayed filing of half yearly returns?
Ans:- As per Section 77, “if a person fails to furnish in due time the return which he is required to furnish under Section 70 or the rules made there under, he shall be liable to penalty which may extend to an amount not exceeding one thousand rupees”.
Q.4.7) Whether a single return is sufficient when an assessee provides more than one service or separate return is to be filed for each service?
Ans: A single return would suffice. However, details in each of the column in Service Tax the Forms ST-3 has to be furnished separately for each of the taxable service rendered by the assessee.
5. RECORDS :-
Q.5.1) Is there any statutory documents prescribed by the Govt. such as specified invoice proforma, specified registers etc. for use by the Service Providers.
Ans:- No specific records have been prescribed to be maintained by a Service Tax assessee. The records including computerised data if any being maintained by an assessee as required under any other law in force. (e.g. Income Tax, Sales Tax) is acceptable to the Central Excise Department for the purpose of Service tax.
Q5.2.) From where do the Service Tax assessee get the forms viz. ST-1, Service Tax-2 etc.?
Ans:- The Forms are available on the websites as well as with the jurisdictional Central Excise Commissionerates.
Q.5.3) Can be Department ask for more information than what assessee is submitting to it in the Form ST-1 and ST-3?
Ans:- Yes, if required the Department can always ask for additional information.
6. REFUNDS:-
Q.6.1) Is the Service Tax payable by the assessee even in cases where his clients do not pay for the service rendered or pay only a part of the bill raised in this regard?
Ans:- The Service Tax is required to be paid only on the value of taxable service received in a particular month or quarter as the case may be and not on the gross amount billed to the client. However, in all such cases where the amount received is less than the gross amount charged/billed to the client, the Service tax assessee are required to amend the bills either by rectifying the existing bill or by issuing a revised bill and by properly endorsing such charge in the billed amount. In case an assessee fails to do so, his liability to pay Service Tax shall be on the amount billed by him to the client for the services rendered.
Q.6.2) What is the procedure for claiming refund?
Ans:- The procedure for claiming refund for the amount due from the Department is as mentioned below:-
i) Submission of application in prescribed Form-R in triplicate to the jurisdictional Assistant Commissioner.
ii) Application should be filed within the prescribed period, i.e. before the expiry of six months from the relevant date as defined in Section 11B of the Central Excise Act, 1944 which has been made applicable to service tax refund matters also.
Application should be accompanied by documentary evidence to establish that the amount claimed as refund is amount paid by him in excess of the service tax due and the incidence of such tax has not been passed on to any other person.
Q.6.3) What is the “Relevant Date” for calculation of limitation period of six months in respect of filing refund claims related to Service Tax?
Ans:- The “Relevant Date” for the purpose of refund(under section 11B of CEA,1944) is date of payment of Service Tax. Thus, the limitation period of six months is to be calculated from the said date.
7) APPELLATE REMEDIES:-
Q.7.1) Who should be approached when an assessee is aggrieved by an order of Assistant Commissioner/Deputy Commissioner in respect of Service Tax?
Ans:- An assessee aggrieved by the order of Assistant Commissioner/Deputy Commissioner in respect of Service Tax, may file an appeal to the Commissioner of Central Excise (Appeals) in Form ST-4, in duplicate along with a copy of order appealed against. The appeal should be presented within three months from the date of receipt of the decision or order of the Central Excise Officer.
Q.7.2) What is the procedure for filing of appeal against the order of Assistant Commissioner/Deputy Commissioner of Central Excise?
Ans:- Any person aggrieved by any order passed by any assessing officer or adjudicating authority below the rank of Commissioner may file an appeal before the Commissioner, Central Excise(Appeals).
i) The appeal shall be filed in the prescribed Form ST-4
ii) It shall be presented within three months from the date of receipt of order which is being appeal against.
iii) It should be filed in duplicate.
iv) It should be accompanied by a copy of the order appealed against.
Q.7.3) Can the time limit of three months for filing the appeal to the Commissioner (Appeal) be extended, if yes, under what circumstances?
Ans:- Yes, if the Commissioner of Central Excise (Appeals) is satisfied that the appellant was prevented by sufficient cause, from presenting the appeal within the statutory period of three months, he may allow the appeal to be presented within a further period of three months.
Q.7.4) Can an appeal be filed against the order of Commissioner of Central Excise or Commissioner of Central Excise (Appeals)?
Ans:- Yes, the law provides for filing an appeal against the order of Commissioner of Central Excise or Commissioner(Appeals). Such appeals can be filed with the CESTAT within them three months of the date of receipt of the order sought to be appealed against.
Q.7.5) What is the procedure for filing appeal against the order of Commissioner of Central Excise or Commissioner (Appeals)?
Ans:- i) Any assessee aggrieved by the Commissioner of Central Excise or the Commissioner (Appeals) may file an appeal before the Appellate Tribunal i.e. CESTAT.
ii) The appeal should be filed within three months from the date of receipt of the order appealed against.
iii) It should be filed in the prescribed from ST-5.
iv) It shall be filed in quadruplicate.
v) It should be accompanied by a copy of the order appealed against, one of which should be a certified copy.
vi) The appeal should be accompanied by a fee of Rs. Two hundred only.
1) GENERAL:-
Q.1.1) What is Service Tax? Is it an indirect tax ?
Ans :- Service Tax is an indirect tax levy imposed under Chapter v of the Finance Act, 1994 as amended. The tax is applicable to services specified in the Section 65 & 66”.
Q.1.2) What is the rate of Service Tax?
Ans:- At present the rate of Service Tax is eight percent to be levied on the “value of taxable service”. Generally speaking “value of taxable service” means the gross amount received by the service provider for the taxable service rendered by him.
Q.1.3) Who is liable to pay Service Tax to the Govt.?
Ans:- The person who provides the taxable service on receipt of charges is responsible for paying the Service tax to the Government.
Q.1.4) Who is liable to pay Service Tax in case service is provided by a person other than Indian resident or who does not have any establishment in India?
Ans:- In this case the services receiver in India is liable to pay Service Tax.
REGISTRATION :-
Q.2.1) Whom & where should one approach for registration?
Ans:- Generally, all Commissionerates of Central Excise, have a Service Tax Cell, headed by Assistant Commissioner/Deputy Commissioner. However, in certain Commissionerates, separate Service Tax Divisions have been constituted. The work is also delegated to Central Excise Divisions in many Commissionerates. A prospective assessee of Service Tax can approach the Assistant Commissioner/Deputy Commissioner in charge of Service Tax cell of the jurisdictional Commissionerates or Central Excise Division for registration depending upon the arrangements made in the Commissionerates.
Q2.2.) What is the procedure for registration?
Ans:- A prospective taxable service provider seeking registration should file an application in Form ST-1(in duplicate) before the jurisdictional Central Excise officer/Service Tax officer within thirty days from the date of notification of the taxable service. Department is required to issue the registration certificate within 7 days of the receipt of the application. In case of failure to issue registration certificate within 7 days, the registration applied for is deemed to have been granted and the assesee can carry on with his activities.
Q.2.3) Who should apply for registration under Service Tax law? Is there any provision for Centralised Registration?
Ans: All persons providing taxable services are required to register with the Central Excise department. They would have to take only one registration even if they operate from more than one premise but have centralised billing at one place. However, if such persons do not have Centralised billing at one place, then they will have to register at each place separately. Besides, only one registration is required to be taken even if an individual provides more than one service but from the same premises.
Q.2.4) What is to be done with the registration when
a) a registered assessee transfers his business to another person, or
b) a registered assessee ceases to carry on the activity for which he is registered?
Ans:- a) When a registered assessee transfers his business to another person the transferee should obtain a fresh certificate of registration.
b) When a registered assessee ceases to carry on the service activity for which he is registered, he should surrender his registration certificate to the Central Excise authorities.
Q.2.5) What is that time limit within which the Service provider should register with the Central Excise department for the service tax purpose once the service is notified or once the assessee commences the business of rendering the taxable service?
Ans:- Every person liable to pay the service tax should make an application to the concerned Central Excise officer for registration within a period of 30 days of the Service tax having come into force. In cases where a person commences the business of providing a taxable service after such service has been notified, he is required to make an application for registration within a period of 30 days from the date of commencement of his activities.
Q.2.6) Whether a service provider can make payment of service tax and file returns before the grant of registration by the proper officer?
Ans :- Yes. A service provider can pay service tax and file returns immediately after applying for registration.
Q2.7) Is there any penal provision for non-registration?
Ans :- Yes. Any offence of failure of non-registration will attract a mandatory penalty of rupees five hundred.
Q2.8) Is obtaining a PAN No. from Income Tax Department a must for obtaining Service Tax Registration?
Ans:- It is not mandatory to have a PAN for obtaining registration in Service Tax. However, it is advisable for Service tax assessees to have a PAN No. as Service Tax Code (STC) Number based on PAN allotted by Income tax department has been introduced in Service Tax also. The main objective of allocating a number is to identify the concerned person where he is located and registered.
3) PAYMENT OF SERVICE TAX :-
Q.3.1) How and where to pay Service Tax?
Ans:- The Service Tax amount is required to be paid in Form TR-6 Challan (yellow in colour) in the specified branches of designated banks. The list of such Banks and Branches is available in every Commissionerate of Central Excise. Different heads of accounts have been specified for different taxable service by the Govt. under which payment has to be made. While making the payment of service tax to the credit of Central Govt., head of account should be correctly and properly indicated under major and minor heads and sub-heads to avoid misclassification.
Q.3.2.) When is Service Tax required to be paid?
ns:- If the assessee is an individual or a proprietary or partnership firm, the Service tax is to be paid on quarterly basis. The payment is to be made by the 25th day of the month following the quarter. For example, Service Tax for the quarter ending 30th June is to be paid by 25th July.
In respect of other categories, the tax is payable on monthly basis and is to be paid by 25th day of the succeeding month.
Q3.3.) Whether the payment of Service tax is to be made for the billed amount or for the value received?
Ans:- The Service Tax for a particular period is payable on the value of taxable service received in that period and not on the gross amount billed to the client.
Q.3.4) Whether Service tax deposited by the assessees in non-designated bank will amount to non-payment of Service Tax?
Ans:- Yes. For payment of service tax, specific Bank has been nominated for every Central Excise Commissionerate. If Service Tax amount is deposited in a branch of Bank other than nominated Bank, it amounts to non-payment of Service Tax.
Q.3.5) What is the date of payment of Service Tax? Is it the date on which the cheque for the same is deposited/tendered in the designated Bank or the date on which the amount is credited?
Ans:- The date of deposit of cheque is the date of payment of Service Tax. The Service Tax Rules as amended provide that it would suffice if the cheque is presented to the bank by the 25th of the month. However, if the cheque bounces, it would mean as if the tax has not been paid and the necessary penal consequences would follow.
Q.3.6) How do you describe the expression “person” appearing in the definition of taxable service?
Ans:- The expression refers to a “legal person” and would include any individual, proprietary firm or partnership firm, company, trust, institution and society etc.
Q.3.7) Would services provided in India for the foreign client be liable for payment of Service tax?
Ans:- Yes, the service tax is payable on all taxable services rendered in India, whether to an Indian or foreign client
Q3.8) Would the service provided abroad liable for payment of service tax?
Ans:- No, the services rendered abroad shall not attract service tax as the levy covers only the services provided within India.
Q.3.9) When payment is made by a client or customer to an assessee after deducting his Income tax liability under “Tax Deducted at source” provision, whether the service tax liability of the assessees is only towards the amount actually received from his client or customer or tax is to be paid on the amount of income tax deducted at source also?
Ans:- The Service tax is to be paid on the value of taxable services which is charged by an assessee. Any income tax deduced at source is included in the charged amount. Therefore, Service tax is to be paid on the amount of income tax deducted at source also.
Q.3.10) What is the interest rate applicable on delayed payment of Service Tax?
Ans:- Every person, liable to pay the tax in accordance with the provisions of Section 68 or rules made thereunder, who fails to credit the tax or any part thereof to the account of the Central Government within the period prescribed, shall pay simple interest at the rate of fifteen percent per annum for the period by which such crediting of the tax or any part thereof is delayed.
Q.3.11) Is the amount for Service Tax charged from the client compulsorily to be indicated separately in the Bills/Invoices raised on him?
Ans:- Yes it is compulsory to separately indicate the amount of Service tax charged in the Bills/Invoices raised on clients in terms of Section 83 of Finance Act, 1994 read with Sec.12A of Central Excise Act, 1944. It is also advisable for the service providers to separately bill the amount of Service tax in the invoice/bill on the basis of taxable value of service rendered, especially so if he requires to avail the input credit scheme.
Q.3.12) Is there any exemption for payment of Service Tax if the receiver/provider of the service is the Central Govt./State Govt. organisation and/or Public Sector undertaking? Can any one of the above claim immunity from the liability to pay or make provision for paying the Service tax?
Ans:- No, there is no such general exemption, exempting the services received/provided by the Central Government/State Government organisation or Public Sector Undertakings. Non one can claim immunity from payment of service tax until specifically provided in law.
Q.3.13) Whether any general exemption from Service tax is available for small scale service providers, as in the central excise?
Ans:- No. At present there is no such general exemption available for small scale service providers.
Q3.14) What are the penal provisions if the service tax is not paid?paid late?
Ans:- Any person liable to pay service tax in accordance with the provisions of Section 68 or the rules made thereunder, who fails to pay such tax shall pay in addition to paying such tax, and interest on that tax in accordance with the provisions of Section 75, a penalty which shall not be less than one hundred rupees but which may extend to two hundred rupees for every day during which such failure continues, so, however, that the penalty under this clause shall not exceed the amount of service tax that he failed to pay?
Q.3.15) Can any adjustment of tax liability be made by an assessee on his own in cases where Service tax has been paid in excess?
Ans:- Yes. As per Rule 6(3)”where an assessee has paid to the credit of Central Government service tax in respect of a taxable service, which is not so provided by him either wholly or partially for any reason, the assessee may adjust the excess service tax so paid by him(calculated on a pro-rata basis) against his service tax liability for the subsequent period, if the assessee has refunded the value of taxable service and the service tax thereon to the person from whom it was received”. In all other cases of excess payment, the refund claims have to be filed with the department.
4. FILING OF RETURNS:-
Q.4.1) How to file Service Tax Returns on what interval and with whom?
Ans:- The Service Tax assessees are required to file a half yearly return in Form ST-3 or ST-3A as applicable in duplicate, to the Superintendent, Central Excise, dealing with Service Tax work. The return is to be filed within 25 days from the last day of the half year it relates to and should be accompanied by copies of all TR-6 Challans issued in the relevant period. Thus, returns for half year ending 30th September and 31st March are required to be filed by 25th October and 25th April, respectively.
Q.4.2.) What is e-filing of Service Tax returns?
Ans:- E-filing is a facility for the electronic filing of Service tax returns by assesee from his office, residence or any other place of choice, through the Internet, by using a computer. The assessee can go to the e-filing site “Home page” by typing the address http://servicetaxefiling.nic.in in the address bar of the browser.
Q4.3) Who can e-file their returns?
Ans:- Any Assesses having a 15 digit STP code can avail of the facility of electronic filing of their “Return”.
Circular number 71/1/2004-ST dated 2/1/04 may be seen for full details at http://www.servicetax.gov.in/servicetax/st-cirmainpg.htm
The assessee should take care to ensure that he has been indicating his 15 digit STP code in the challans used by him from September 2002. An assessee who has not done this may also opt for e filing but he will have to submit copies of challans manually to the department after e filing his return, evidencing payment of duties, after indicating his 15 digit STP code on each challan.
Q.4.4) What is the procedure for e-filing?
Ans: Those assesses who have 15 digit Service Tax Payer Code allotted to them, should file an application to their jurisdictional AC/DC as laid out in Trade Notice insured in this regard. They should mention a trusted e-mail address in their application, so that the department can send them their username and password to help them file their return. They should long on to the Service Tax E-filing Home page using the Internet. On entering their STP code, user word and password in the place provided on the Home page they will be permitted access to the E filing facility. They should then follow the instructions given therein..
Q.4.5) What is to be done when no services are provided for in a half-year?
Ans:- If no service have been provided during a half year no Service Tax payable; the assessee may file a Nil Return within the prescribed time limit.
Q.4.6) What is the penalty for non-filing or delayed filing of half yearly returns?
Ans:- As per Section 77, “if a person fails to furnish in due time the return which he is required to furnish under Section 70 or the rules made there under, he shall be liable to penalty which may extend to an amount not exceeding one thousand rupees”.
Q.4.7) Whether a single return is sufficient when an assessee provides more than one service or separate return is to be filed for each service?
Ans: A single return would suffice. However, details in each of the column in Service Tax the Forms ST-3 has to be furnished separately for each of the taxable service rendered by the assessee.
5. RECORDS :-
Q.5.1) Is there any statutory documents prescribed by the Govt. such as specified invoice proforma, specified registers etc. for use by the Service Providers.
Ans:- No specific records have been prescribed to be maintained by a Service Tax assessee. The records including computerised data if any being maintained by an assessee as required under any other law in force. (e.g. Income Tax, Sales Tax) is acceptable to the Central Excise Department for the purpose of Service tax.
Q5.2.) From where do the Service Tax assessee get the forms viz. ST-1, Service Tax-2 etc.?
Ans:- The Forms are available on the websites as well as with the jurisdictional Central Excise Commissionerates.
Q.5.3) Can be Department ask for more information than what assessee is submitting to it in the Form ST-1 and ST-3?
Ans:- Yes, if required the Department can always ask for additional information.
6. REFUNDS:-
Q.6.1) Is the Service Tax payable by the assessee even in cases where his clients do not pay for the service rendered or pay only a part of the bill raised in this regard?
Ans:- The Service Tax is required to be paid only on the value of taxable service received in a particular month or quarter as the case may be and not on the gross amount billed to the client. However, in all such cases where the amount received is less than the gross amount charged/billed to the client, the Service tax assessee are required to amend the bills either by rectifying the existing bill or by issuing a revised bill and by properly endorsing such charge in the billed amount. In case an assessee fails to do so, his liability to pay Service Tax shall be on the amount billed by him to the client for the services rendered.
Q.6.2) What is the procedure for claiming refund?
Ans:- The procedure for claiming refund for the amount due from the Department is as mentioned below:-
i) Submission of application in prescribed Form-R in triplicate to the jurisdictional Assistant Commissioner.
ii) Application should be filed within the prescribed period, i.e. before the expiry of six months from the relevant date as defined in Section 11B of the Central Excise Act, 1944 which has been made applicable to service tax refund matters also.
Application should be accompanied by documentary evidence to establish that the amount claimed as refund is amount paid by him in excess of the service tax due and the incidence of such tax has not been passed on to any other person.
Q.6.3) What is the “Relevant Date” for calculation of limitation period of six months in respect of filing refund claims related to Service Tax?
Ans:- The “Relevant Date” for the purpose of refund(under section 11B of CEA,1944) is date of payment of Service Tax. Thus, the limitation period of six months is to be calculated from the said date.
7) APPELLATE REMEDIES:-
Q.7.1) Who should be approached when an assessee is aggrieved by an order of Assistant Commissioner/Deputy Commissioner in respect of Service Tax?
Ans:- An assessee aggrieved by the order of Assistant Commissioner/Deputy Commissioner in respect of Service Tax, may file an appeal to the Commissioner of Central Excise (Appeals) in Form ST-4, in duplicate along with a copy of order appealed against. The appeal should be presented within three months from the date of receipt of the decision or order of the Central Excise Officer.
Q.7.2) What is the procedure for filing of appeal against the order of Assistant Commissioner/Deputy Commissioner of Central Excise?
Ans:- Any person aggrieved by any order passed by any assessing officer or adjudicating authority below the rank of Commissioner may file an appeal before the Commissioner, Central Excise(Appeals).
i) The appeal shall be filed in the prescribed Form ST-4
ii) It shall be presented within three months from the date of receipt of order which is being appeal against.
iii) It should be filed in duplicate.
iv) It should be accompanied by a copy of the order appealed against.
Q.7.3) Can the time limit of three months for filing the appeal to the Commissioner (Appeal) be extended, if yes, under what circumstances?
Ans:- Yes, if the Commissioner of Central Excise (Appeals) is satisfied that the appellant was prevented by sufficient cause, from presenting the appeal within the statutory period of three months, he may allow the appeal to be presented within a further period of three months.
Q.7.4) Can an appeal be filed against the order of Commissioner of Central Excise or Commissioner of Central Excise (Appeals)?
Ans:- Yes, the law provides for filing an appeal against the order of Commissioner of Central Excise or Commissioner(Appeals). Such appeals can be filed with the CESTAT within them three months of the date of receipt of the order sought to be appealed against.
Q.7.5) What is the procedure for filing appeal against the order of Commissioner of Central Excise or Commissioner (Appeals)?
Ans:- i) Any assessee aggrieved by the Commissioner of Central Excise or the Commissioner (Appeals) may file an appeal before the Appellate Tribunal i.e. CESTAT.
ii) The appeal should be filed within three months from the date of receipt of the order appealed against.
iii) It should be filed in the prescribed from ST-5.
iv) It shall be filed in quadruplicate.
v) It should be accompanied by a copy of the order appealed against, one of which should be a certified copy.
vi) The appeal should be accompanied by a fee of Rs. Two hundred only.
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