Circular No. 88/06/2006-ST
6th November, 2006
F. No. 137/127/2006-CX.4
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Excise and Customs)
Sub:- Mandatory E-Payment of Service Tax for major assessees – reg.
The e-payment of service tax has been made mandatory w.e.f . 1.10.2006, for all assesses who has paid Rs 50 lakh or more in the preceding financial year or in the current financial year.
2. It has been brought to the notice of the Board that there are certain problems like procedural delays in opening of account in designated banks and issue of user’s-id and password by banks for internet banking; delays in passing a resolution by the Board of Directors of a company to authorize any person for making e-payment ( a requirement stipulated by banks for internet banking); systems failure, particularly at bank’s end, are causing some difficulties to the assessee in complying with the requirement of mandatory e-payment of service tax. Keeping in view the systemic and procedural problems during initial phase of implementation of this scheme, the field formation may take a lenient view in such case where there is reasonable cause for failure to make mandatory e-payment and penal action may not be initiated. At the same time, such assesses should expeditiously complete the procedural formalities for availing internet banking facility from designated banks and comply with the requirement of mandatory e-payment.
3. Certain doubts have also been raised as regards the interpretation of qualifying amount of service tax of Rs 50 lakh paid by the assessee, as discussed below.
3.1 For a person providing taxable service from more than one premises, where each such premises is separately registered with the department for payment of service tax, the criterion of Rs 50 lakh would apply to each registered premises individually, as each registered premises is separately an assessee in terms of law. Similar is the situation in the case of a person paying service tax on taxable service received by him. However, in case of a Large Taxpayer (LTU), the cumulative service tax paid by all registered premises of such Large Taxpayer will be taken into account for satisfaction of criterion of payment of service tax amount of Rs 50 lakh.
3.2. If a person pays service tax from a registered premises for both the taxable services provided by him and the taxable service received by him on which he is liable to pay service tax, the cumulative service tax paid, i.e., service tax paid on taxable service provided from and service tax paid on taxable service received in such registered premises would be taken into account for the purposes of satisfaction of criterion of payment of service tax amount of Rs 50 lakh.
3.3 Further, for the purposes of calculation of this amount of Rs 50 lakh the total service tax paid by cash plus CENVAT credit would be taken into account as service tax paid amount. Therefore, if an assessee has paid service tax of Rs 50 lakh (in preceding financial year or the current year) in cash plus CENVAT credit, such assessee, if he pays any further service tax in cash, would be required to make mandatory e-payment.