Service Tax Provisions Related to Filing of Half Yearly Returns and Records to be Maintained by Assessee

1. What are the Returns a service tax assessee has to file?

ST-3 Return – For all the registered assessee, including Input Service Distributors, (Ref. Section 70 of Finance Act,1994 and Rule 7 of Service Tax Rules, 1994 read with Notfn.No. 14/2007-ST dated 02.04.2007).

ST-3A Return –The assessee who is making provisional assessment under rule 6(4) of the Service Tax Rules, 1994.

The Forms are available at any Stationery shop selling Govt. forms. These can also be downloaded from www.cbec.gov.in

2. When to file returns?

ST-3 Return is required to be filed twice in a financial year ± half yearly.

Return for half year ending 30th September and 31st March are required to be filed by 25th October and 25th April, respectively.

3. How to file Service Tax Returns?

The details in respect of each month/ Quarter, as the case may be, of the period for which the return is filed, should be furnished in the Form ST-3, separately. The instructions for filing return are mentioned in the Form itself.

It should be accompanied by copies of all the GAR-7 Challans for payment of Service Tax during the relevant period.

4. Is there any provision to file a revised return?

Yes, under rule 7B of Service Tax Rules, 1994 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. However, 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 Finance Act, 1994, shall be the date of submission of such revised return.

5. Where to file return?

ST-3 or ST-3A is filed in triplicate to the Superintendent of Central Excise/Service Tax with whom the assessee has registered himself. [Section 70 of the Finance Act, 1994].

6. What is e-filing of Service Tax Returns?

The e-filing is a facility for electronic filing of Service Tax Returns through the Internet.

7. Is E-filing of Returns mandatory?

E-filing of Returns is mandatory for any assessee who has paid Service tax of rupees ten lakhs or more including the amount paid by utilization of CENVAT credit, in the preceding financial year shall file return by electronically as provided by Rule 7(2) [Notification No. 01/2010-ST dated 19/02/2010].

8. What is the procedure for e-filing?

(i) File an application to the jurisdictional Asst./Deputy Commissioner of Service Tax, specifying- 15-digit PAN based registration number (STP Code) – Valid e-mail address – so that the Department can send them their User ID and password to help them file their Return.

(ii) Log on to the Service Tax e-filing home page by typing the address http://servicetaxefiling.nic.in in the address bar of the browser.

(iii) Upon entering the Service Tax code, user ID and password, you will be permitted to access the e-filing facility.

(iv) Follow the instructions given therein for filing the Returns electronically.

(v) Obtain the acknowledgement.

9. Is filing of return compulsory even if no taxable service provided or received or no payments received during a period (a particular half year)?

Filing of return within the prescribed time limit is compulsory, even if it may be a nil return, failing which penal action is attracted.

10. Whether a single Return is sufficient when an assessee provides more than one service?

A single return is sufficient because the ST-3 Return is designed to capture details of each service separately within the same return.

11. Is there any penalty for non-filing or delayed filing of the Returns?

If a person fails to file the ST-3 Return by the due date [25th October and 25th April every year], he shall be liable to penalty which may extend to Rs. Five thousand rupees (Section 77 of the Act)

Mandatory Penalty for Late filing of ST-3 Return under Rule 7C of Service Tax Rules, 1994

Sr.No.	Period of Delay from the prescribed date	Penalty
1	15 days	Rs.500/-
2	Beyond 15 days but not later than 30 days	Rs.1000/-
3	Beyond 30 days	Rs.1000/- plus Rs. 100/- for every day from the thirty first day till the date of furnishing the said return (not exceeding Rs.2000)

5. Records

1. Are there any statutory documents prescribed by the Government such as specified invoice proforma, specified registers etc. for use by the service providers?

There are no specific statutory records which have to be maintained by a Service Tax assessee. The records including computerized data, if any, which are being maintained by an assessee on his own or as required under any other law in force, such as Income Tax, Sales Tax etc. are acceptable for the purpose of Service Tax – (Rule 5(1) of the STR, 1994).

However, under the revised rule 5(2) of the STR, 1994 (with effect from 28th December, 2007), the assessee is required to provide to the jurisdictional Superintendent of Central Excise/Service Tax a list, in duplicate, of 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 and all other financial records maintained by him in the normal course of business,

2. Where from the Service Tax assessee can get the Forms such as ST-1, ST-3 etc?

The Forms are available on the CBEC website and also at the Central Excise Range/Division/Commissionerate Hqrs. offices. The forms are also available in the market and are sold by private publishers.

3. Can the Department ask for more information than what assessee is submitting to it in the Form ST-1 and ST-3?

Yes. If it is felt necessary, the Department can call for additional information/ documents for scrutiny, as per Rule 6(6) of the STR, 1994 and Sec. 14 of the Central Excise Act, 1944 which is made applicable to Service Tax matters, as per Sec. 83 of the Finance Act, 1994.

Rule 5A of STR, 1994 provides that every assessee, on demand, is required to make available to the Central Excise/Service Tax officer authorized by the Commissioner or the audit party deputed by the Commissioner or the Comptroller and Auditor General of India, within a reasonable time not exceeding fifteen working days from the day when such demand is made, or within such further period as may be allowed by such officer or the audit party, the following records/documents for the scrutiny of the officer or audit party:

i. the records as mentioned in Rule 5(2) of STR, 1994;

ii. trial balance or its equivalent; and

iii. the income-tax audit report, if any, under section 44AB of the Income-tax Act, 1961 ( 43 of 1961).

In the event of failure to make available the records/documents, a penalty of Rs. 5000 or Rs.200 for every day during which such failure continues, whichever is higher, starting with the first day after the due date, till the date of actual compliance, is imposable on the assessee under amended section 77 of the Finance Act, 1994 (with effect from 10th May, 2008).

4. Can a Service Tax officer access an assessee‘s registered premises?

As provided under Rule 5A of STR, 1994, an officer authorized by the Commissioner can have access to an Assessee’s registered premises for the purpose of carrying out any scrutiny, verification and checks as may be necessary to safeguard the interest of revenue.

5. Whether issue of Invoice/Bill/Challan is mandatory? When should the same be issued?

Issue of Invoice/Bill/Challan by a Service Tax assessee is mandatory as per Rule 4A of the STR, 1994. The same should be issued within 14 days from the date of completion of taxable service or receipt of payment towards the service, whichever is earlier. However, if the service is provided continuously for successive periods of time and the value of such taxable service is determined or payable periodically, the Invoice/Bill/Challan shall be issued within 14 days from the last day of the said period (Proviso to Rule 4A (1) of the STR 1994).

6. Is there any prescribed format for the Invoice/Bill?

There is no prescribed format for issue of Invoice. However, the invoice/bill/challan should contain the following information (Rule 4A of the STR, 1994):

i. Serial number.

ii. Name, address and registration no. of the service provider.

iii. Name and address of the service receiver.

iv. Description, classification and value of taxable service being provided or to be provided.

v. The amount of Service Tax payable (Service Tax and Education cess should be shown separately)

Note: If the service provider is a Banking company, the details at Sl. No (i) and (iii) are not necessary.

In respect of the taxable services relating to the transport of goods by road, provided by the Goods Transport Agency, the service provider should issue a consignment note containing the following information (Rule 4B of the STR, 1994): –

i. Serial Number

ii. Name of the consignor and consignee

iii.Registration no. of the vehicle

iv. Details of the goods transported

v. Details of the place of origin & destination

vi. Person liable for payment of Service Tax (consignor /consignee / GTA)

7. Is the amount of Service Tax charged from the client compulsorily to be indicated separately in the Bills / Invoices / Challans raised on him?

Yes. It is mandatory to separately indicate the amount of Service Tax charged in the Bills/Invoices/Challans raised on the clients, as per Section 12A of the Central Excise Act, 1944 which is made applicable to Service Tax, under Sec.83 of the Finance Act, 1994. Such mention of the Service Tax amount in the Invoice / Bill / Challans, would also facilitate the service receiver to avail the CENVAT credit of the Service Tax paid on the input services.

8. What is the preservation period for service tax records and documents?

All records and documents concerning any taxable service, CENVAT transactions etc. must be preserved for a minimum period of 5 years immediately after the financial year to which such records pertain (Rule 5(3) of Service Tax Rules 1994.)