CA. N.K. Bharath Kumar
It is a self assessed statutory document notified by the Central Board of Excise and Customs which functions under the Ministry of Finance for the service providers to enable them to declare the value of taxable services provided or received by them and the taxes paid by them for the same.
2. Why ST-3 Return?
Service Tax Law is based on Self Assessment. Hence, it is the obligation of the assessee to inform the Service Tax Authorities about his taxable turnover and the amount of tax assessed on the same. The medium to inform the Service Tax Authorities is called ST-3 return. Only when assessee declares the values of services rendered and tax amount paid by him, the Service Tax authorities will be made aware of the fact as per Self Assessment Mechanism.
3. Who is the person liable for filing of ST-3 Returns?
As per Section 70 of Finance Act, 1994,
(1) Every person liable to pay the service tax shall himself assess the tax due on the services provided by him and shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency and with such late fee not exceeding twenty thousand rupees, for delayed furnishing of return, as may be prescribed.
(2) The person or class of persons notified under sub-section (2) of section 69, shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency as may be prescribed.
Section 69(2): The Central Government may, by notification in the Official Gazette, specify such other person or class of persons, who shall make an application for registration within such time and in such manner and in such form as may be prescribed.
Therefore, every person who is liable to pay service tax and class of persons who are notified by Central Government as per Section 69(2) are the persons liable to file ST-3 returns. Every registered assessee who is holding the Certificate of Service Tax registration has to file the ST-3 returns in the intervals specified by the Government till he surrenders the certificate.
4. What is the periodicity of the ST-3 return and when the same has to be submitted?
Rule 7 of Service Tax Rules, 1994 states:
(1) Every assessee shall submit a half-yearly return in Form ‘ST-3’ or ‘ST-3A’, as the case may be, along with a copy of the Form TR-6, in triplicate for the months covered in the half-yearly return.
(2) Every assessee shall submit the half yearly return by the 25th of the month following the particular half-year.
Hence, every assessee has to submit a half yearly return in the form prescribed which is ST-3 in TRIPLICATE along with the copy of GAR-7 Challans for the six months covered in the half yearly return. i.e. April – September and October – March. The return has to be submitted within 25th of the month following the particular half year. In other words, the return for the period April to September has to be filed on or before 25th October succeeding the half year and the return for the period October to March has to be filed on or before 25th April succeeding the half year.
5. Is there any requirement to file a list of documents and records maintained by the assessee to the Service Tax Department?
Yes. Every assessee shall furnish to the Superintendent of Central Excise at the time of filing his return for the first time a list in duplicate of the following:
a. All the records prepared or maintained by the assessee for accounting of transactions in regard to
(a) providing of any service, whether taxable or exempted;
(b) receipt or procurement of input services and payment for such input services;
(c) receipt, purchase, manufacture, storage, sale, or delivery, as the case may be, in regard of inputs and capital goods;
(d) other activities, such as manufacture and sale of goods, if any
b. all other financial records maintained by him in the normal course of business];
6. Whether a return which is filed can be revised? If yes, then how many times it can be revised?
Rule 7B of Service Tax Rules talks about “Revision of Return”. — An assessee may submit a revised return, in Form ST-3, in triplicate, to correct a mistake or omission, within a period of ninety days from the date of submission of the return under rule 7.
Explanation. – Where an assessee submits a revised return, the ‘relevant date’ for the purpose of recovery of service tax, if any, under section 73 of the Act shall be the date of submission of such revised return.
Therefore, a return which is filed can be revised to correct a mistake or omission. The time limit provided for revision of return is 90 days from the date of submission of the return under Rule 7. The rule also explains that, for the purpose of recovery of service tax under Section 73 (Issue of Show Cause Notice) the date of submission of such revised return will be considered as relevant date to calculate the time limit for issue of Show Cause Notice.
7. What if I have not filed the returns within the prescribed due date?
Rule 7C of Service Tax Rules, 1994 has the reply to the above question.
Amount to be paid for delay in furnishing the prescribed return. — Where the return prescribed under rule 7 is furnished after the date prescribed for submission of such return, the person liable to furnish the said return shall pay to the credit of the Central Government, for the period of delay of –
(i) fifteen days from the date prescribed for submission of such return, an amount of five hundred rupees;
(ii) beyond fifteen days but not later than thirty days from the date prescribed for submission of such return, an amount of one thousand rupees; and
(iii) beyond thirty days from the date prescribed for submission of such return an amount of one thousand rupees plus one hundred rupees for every day from the thirty first day till the date of furnishing the said return:
Provided that the total amount payable in terms of this rule, for delayed submission of return, shall not exceed the amount specified in section 70 of the Act:
Provided further that where the assessee has paid the amount as prescribed under this rule for delayed submission of return, the proceedings, if any, in respect of such delayed submission of return shall be deemed to be concluded:
Provided also that where the gross amount of service tax payable is nil, the Central Excise officer may, on being satisfied that there is sufficient reason for not filing the return, reduce or waive the penalty.
Where an assessee is filing the ST-3 return after the due dates that are prescribed, he makes himself liable for payment of late fees as imposed by Section 70 read with Rule 7C of Service Tax Rules, 1994.
The maximum late fee prescribed by the statute is Rs.20000/- . The mechanism of calculation of late fee is as below:
Delay of 1 – 15 days – Late Fee of Rs.500/-
Delay of 15 – 30 days – Late Fee of Rs.1000/-
Delay of 31st day Onwards – Late Fee of Rs.1000/- Plus Rs.100/- per day, subject to maximum limit of Rs.20000/-
When an assessee remits this late fee and files the return, for a particular period, then proceedings if any, in respect of such delayed submission of return (alone) shall be deemed to be concluded.
The rule also provides that, in case of a NIL Return, i.e. When the Gross Amount of Service Tax payable is NIL, the departmental officer (Superintendent of Central Excise / Service Tax) may reduce or waive the late fee for delay in filing of returns on providing sufficient cause / reason for non filing of returns in time.
8. What is the method to file the Service Tax Return?
The Central Board of Excise and Customs came out with Notification No.43/2011 – Service tax dated 25 August 2011, amending Rule 7 of Service Tax Rules, 1994 wherein, it was stated that, “Every assessee shall submit the half-yearly return electronically”.
Therefore, all the assessees are now required to file their half yearly service tax return by electronic mode only.
CBEC vide its Circular No. 919/09/2010 –CX dt. 23rd March,2010 has circulated comprehensive instructions outlining the procedure for electronic filing of excise and service tax return. The extract of the circular is as produced below:
The assesses can electronically file statutory returns of Central Excise and Service Tax by choosing one of the two facilities being offered by the department at present:
(a) they can file it online, or
(b) download the off-line return utilities which can be filled-in off-line and uploaded to the system through the internet.
9. What are the steps for preparing and filing returns?
Ø Returns can be prepared and filed on line by selecting the ‘Fill ST-3’ option under RET module after logging into the ACES.
Ø All validations are thrown up during the preparation of the return in this mode and the status of the return filed using the online mode is instantaneously shown by ACES.
OFF LINE MODE:
Ø Returns can also be prepared and filed off-line. Assessee downloads the Offline return preparation utility available at http://www.aces.gov.in (
Ø Prepare the return offline using this utility. The return preparation utility contains preliminary validations which are thrown up by the utility from time to time.
PROCEDURE TO UPLOAD
Ø Assessee logs in using the User ID and password.
Ø Select RET from the main menu and upload the return. Instructions for using the offline utilities are given in detail in the Help section, under ‘Download’ link and assessees are advised to follow them.
Ø Returns uploaded through this procedure are validated by the ACES before acceptance into the system which may take up to one business day. Assessee can track the status of the return by selecting the appropriate option in the RET sub menu. The status will appear as “uploaded” meaning under process by ACES, “Filed” meaning successfully accepted by the system or “Rejected” meaning the ACES has rejected the return due to validation error. The rejected returns can be resubmitted after corrections.
Ø Once the Central Excise returns are filed online in ACES or uploaded to the system using the off-line utility, the same cannot be modified or cancelled by the assessee, except by filing of revised return.
Validation of the entries made while filling return
1. At the time of making entry in the electronic format of the relevant return, the software does some preliminary validation for ensuring correctness of data, either concurrently or at the time of saving / submitting the return. This validation process is automated. The user is prompted by the application software to correct the particulars entered wherever required. In respect of certain entries, although the application alerts the assessee about any entry found erroneous or inconsistent, as per the automated validation process, the assessee is still allowed to proceed further to complete data entry of the return and finally submit it electronically. But in some cases the assessees are not allowed to proceed further unless the error indicated is corrected.
2. A return filed electronically is subject to automatic verification process by the application and defective returns are marked to the departmental officer for review and correction. While reviewing the return the officer may seek some clarification from the assessee, call for some information, records or documents which should be furnished by the assessee. In case of review and correction of returns by the departmental officers, assesses will receive a message from the application and they can log in to the application to view the reviewed returns online.
3. Returns, captured off-line using the Downloadable utility and uploaded later on, are further subjected to certain validation checks. Processing of uploaded returns, using the off-line versions, is done at the end of one business day and the status can be viewed by the assessees under the ‘VIEW STATUS’ link under ‘RET’ module. Status is described as ‘UPLOADED’, ‘FILED’ or ‘REJECTED’ and they denote as follows:
o UPLOADED denotes that return is uploaded and under processing (assessees are advised to view the status after the end of a business day).
o FILED denotes that uploaded return is accepted by system.
o REJECTED denotes that return is rejected due to errors. (The assessees are required to correct the return and upload it again.)
4. There is no provision in ACES application to allow assessees to make corrections to the returns filed by them. Once the return is accepted by the system as successfully ‘filed’, no modification can be made by the assessee. However, if the return is rejected, the assessee can correct the errors and upload it again. The assessees are, therefore, advised to take utmost care while fill-in in the returns. They may, however, bring it to the notice of the departmental officers.
Acknowledgement of E-Filing of the return
In the case of a Service Tax return filed on-line, ACES application software acknowledges it by displaying an Acknowledgement message. A unique document reference number is generated which consist of 15-digit registration number of the assessee, name of the return filed, the period for which return is filed etc. This is also automatically communicated to the email id of the assessee by the application. In the case of an uploaded Central Excise return, using offline utility, similar acknowledgement is generated and sent after the acceptance of the return by the system as a valid return i.e. when the status changes to ‘FILED’.
10. Whether anybody can assist in Filing of Returns and other documents through the ACES?
CBEC has set up ACES Certified Facilitation Centres (CFCs) with the help of professional bodies like Institute of Chartered Accountants of India (ICAI), Institute of Cost and Works Accountants of India (ICWAI) etc. These CFCc will provide a host of services to the assessees such as digitization of paper documents like returns etc. and uploading the same to ACES. Assessees requiring the services of the CFCs may be required to pay service fees to the CFCs. CBEC will approve the maximum rates at which CFCs can charge their customers for the services rendered by them. For this purpose, assessees are required to write to the department authorizing one of the CFCs, from the approved list, to work in ACES on their behalf. They have to furnish the name and other details of the CFCs, including the registration No issued by the ICAI/ICWAI etc. At any given time, one assessee can authorize one CFC, while one CFC can provide services to more than one assessee throughout India. In case the assessee wants to withdraw the authorization, it can do so by intimating the department. However, an assessee will be held liable for all actions of omission or commission of the CFC, during the period they are authorized by him/her to work in ACES.
11. Responsibility of the Assessee
1. It is the legal responsibility of the assessees, who are required to file returns, to file it within the due date as prescribed under law. The electronic filing of returns is mandatory for all
2. It may, however, be noted that merely uploading the returns will not be considered as returns having been filed with the department.
3. A return will be considered as filed, when the same is successfully accepted by the application as ‘Filed’ and the relevant date for determining the date of filing of return will be the date of uploading of such successfully ‘filed’ returns.
4. In case a return is ‘rejected’ by the application, the date of uploading of the rejected return will not be considered as the date of filing, rather the date of uploading of the successfully ‘filed’, return (after the assessee carries out necessary corrections and uploads it again) will be considered as the actual date of filing.
In case the assessee experiences any difficulty in transacting in ACES such as filing of return,
Ø the assessees may lodge a complaint with the ACES Service Desk or the department by e-mail and/or by telephone, and obtain a ticket no. as an acknowledgement from the department.
Ø However, mere lodging of complaints with the ACES service desk will not be a valid ground to justify late filing of returns.
Ø If the difficulty is not on account of problems at the assessee’s end, and can be clearly attributed to the department’s IT infrastructure such as problems in accessing CBEC’s ACES application due to server, network or application being down, proportionate time will be deducted from the date of uploading of successfully ‘filed’ returns to ascertain the actual date and time of filing of the return. Since the department maintains logs of such technical failures, in case of any dispute, the decision of the department will be final.
12. SEQUENTIAL FLOW OF WORK IN FILING OF RETURNS.
a. ONLINE MODE
www.aces.gov.in → Service Tax → Enter User Name and Password → Go to RET Menu → Fill ST-3 → Fill → Select the Premises for which return is being filled → Enter the details in ST-3 → Validation part will come up while you are entering the data like – Enter Numeric data, Value of Service Tax Payable and Paid does not match, Opening Balances of CENVAT Credit does not match with the data as per the previous return → Verify the correctness of the each and every data entered → When you come to final page → Save the return → You will get a PDF file of the entire return filed by you → Take a print out → Go through the return twice to identify the corrections to be made if any → If corrections are there → Click Modify → Make the Changes → Again come to final page and save → Check whether the changes have been incorporated → Self assure your self that data is clear and correct → Submit the Return → It will ask for confirmation → Provide Yes and Submit it → You will get an acknowledgement of return being filed successfully → Print it and keep it in your file → Go to RET Menu → View ST-3 → Enter the period for which the return is filed → You will get a window with the details → click on the Hyperlink provided with the acknowledgement number of the ST-3 filed by you → ST-3 in PDF will open up → check the status for the entry “FILED” → Take Print and save it in your file.
Note – 1:
During the time of saving the return and taking print out for verification, if the website is left idle for 30 minutes, the session may expire. Hence, during this time, if it is possible to review and file within 30 minutes, you can proceed to file. Else, you can still save the return and log out and check your saved return.
After Checking your saved return → www.aces.gov.in → Service Tax → Enter User Name and Password → Go to RET Menu → Fill ST-3 → Select Amend ST-3 → Enter the Period for which the return was saved → Click on the Hyperlink of the return appearing on the screen → The ST-3 will open up from the first page with the all data that were keyed in → Make the necessary changes and Save it → click the submit button and your return is FILED.
Note – 2:
During the time of filing of return online, in case, you are unable to complete the return and it is left half way due to say power failure or network connectivity, ..etc In such case:
Go to → www.aces.gov.in → Service Tax → Enter User Name and Password → Go to RET Menu → Fill ST-3 → Select Complete ST-3 → Enter the Period for which the return was being filled → Click on the Hyperlink of the return appearing on the screen → The ST-3 will open up from the first page with the all data that were keyed in → Make the balance entries and Save it → click the submit button and your return is FILED.
b. OFFLINE MODE
Part-1 : www.aces.gov.in → Download → Under Excel Utility → Download ST-3 Return Excel Utility → Open the Excel Utility → Ensure Macros are enabled → Fill the ST-3 Return → Validate the return and generate XML File
Part-2: Go to → www.aces.gov.in → Service Tax → Enter User Name and Password → Go to RET Menu → E Filing → Upload File → Select the Financial Year → Select the Half Year period for which the return is being filed → Choose the XML File generated to be uploaded → Upload the File → It will ask for confirmation → Confirm the submission → Your return will be successfully uploaded → You will be able to view the status of the return filed after one business day.
Part–3: Go to → www.aces.gov.in → Service Tax → Enter User Name and Password → Go to RET Menu → E-filing → View Status → Enter the Period for which the return was uploaded → Example : 01/04/2011 to 30/09/2011 → The status of the return will be either “REJECTED / FILED” → If rejected, the hyperlink of the return filed will appear → Click on the Hyperlink → It will show the error in the return → Modify the Excel Utility Sheet and generate XML again follow the same procedure as mentioned in Part 2
In case the status is FILED → Go to RET Menu → View ST-3 → Enter the Period for which the return was uploaded → Example : 04/2011 to 09/2011 → You will get a screen with the details of the return filed for the period → Under Return Number, you will get a Hyperlink of the return filed → click the same → You will get a PDF file of the return filed → Take Print and Save it in your file.
CA. N.K. Bharath Kumar
Email: [email protected]