service tax - registration & returns - bangalore icai · 2018-10-31 · service tax -...

12/3/2009

1

Service Tax -

REGISTRATION

& RETURNS

Presented by

CA CHANDRA SHEKAR.B.D

BCom, LLB, FCA, DISA

Partner

M/s. Shekar & Yathish

Chartered accountants

M/s. Shekar & Yathish, Chartered Accountants

REGISTRATION & RETURNS -

SIGNIFICANCE

Good corporate governance

Compliance with regard to provisions of

SERVICE TAX

Non-registration & non-filing returns within

the prescribed time attracts penalty

12/3/2009

2


Forms Under Service Tax

FORM ST- 1 Application form for registration

FORM ST- 2 Certificate of registration

FORM ST- 3 Return u/s 70

FORM ST-3A Memorandum for provisional deposit

FORM ST- 4 Form of Appeal to the Commissioner of Central Excise (Appeals) u/s 85

FORM ST- 5 Form of Appeal to Appellate Tribunal u/s 86

FORM ST- 6 Form of memorandum of cross objections to the Appellant Tribunal u/s 86

FORM ST- 7 Form of application to Appellate Tribunal u/s 86(2) / 86(2A)

GAR – 7 Service Tax Payment Challan


REGISTRATION

12/3/2009

3


REGISTRATION - SERVICE TAX

PERSONS LIABLE TO REGISTER U/R 4

Person providing taxable service

Taxable service value exceeding 9

Lakhs

In case a recipient is liable to pay

service tax

Input Service Distributor



Each premises providing / receiving taxable service –

to be registered

Exception:

Centralised registration – location where

centralised billing system / accounting system is

done

More than one location

At the option of the assessee

Jurisdictional CCE - to grant registration

12/3/2009

4


EXEMPTION FOR SMALL

SERVICE PROVIDER

Notification 8/2008

Service receiver – no exemption

An exemption of Rs.10 Lakhs subject to

• > Rs.10 Lakhs in the preceding FY

• Each premise / Each service

• Taxable services rendered by a person under a

brand name or trade name whether registered

or not, of another person.

Once opted cannot be withdrawn for such FY


CASE STUDY

A Co. incorporated on 20-04-2009. Whether

SSP exemption could be claimed?

In PY 2008-09 – Taxable service billed – Rs.9

Lakh. Received – Rs.11 Lakh. For FY 2009-10,

whether SSP exemption could be claimed?

XYZ Ltd – service received with regard to GTA –

Rs.50K and no other taxable service. Should

registration be obtained?

12/3/2009

5


CASE STUDY

1) Industrial Construction Service :-

Gross amount received - Rs.15 Lakh

Taxable amount (33%) - Rs.4.95 Lakh

For SSP exemption limit, Rs. 15 Lakh / Rs.

4.95 Lakh to be considered ?

2) Total Taxable Service - Rs.6 Lakhs

Exempted Services (100% ) - Rs.4.5 Lakhs

Whether registration is required?


CRITERION - taxability

Check for (Case I – Service Provider) :

Service rendered is falling under the scope

of any of the taxable Service u/s 65 (105)

General or specific exemption available

under any notification

Small service providers

Service charges for service received or to

be provided

Eligibility for abatements

12/3/2009

6


Check for (Case II – Service Receiver) :

Applicability of Sec 68 (2) r/w Rule 2(d) of

Service Tax Rules, 1994

Not entitled to value based exemption for

small service providers

Service being a taxable service, the recipients

of the service shall pay Service Tax having

regard to the exemptions / abatements

admissible, if any

CRITERION - taxability


Input Service Distributor

(ISD)

Registration to be obtained under the category

of ISD

ISD to distribute the ST credits among the

service providing branches/offices.

Branches/offices have registered at multiple

places.

Eligibility for availing credit may be examined.

No specific procedure for distribution of credit.

General practice – raise an invoice

12/3/2009

7



Section 69 r/w Rule 4

Application shall be filed to

Superintendent of Central Excise

Application is to be in form No. ST-1

Within 30 days

Registration certificate shall be issued

within 7 days in form ST-2

12/3/2009

8

12/3/2009

9


CHECKLIST - REGISTRATION

Self certified copy of PAN (where allotment is pending, copy of the application for PAN may be given)

Copy of MOA/AOA in case of Companies

Copy of Board Resolution in case of Companies

Copy of Lease deed/Rental agreement of the premises

A brief technical write up on the services provided

Registration certificate of Partnership firm

Copy of a valid Power of Attorney where the owner/MD/Managing Partner does not file the application

12/3/2009

10


INITIAL DECLARATIONS

Declaration of the books of accounts

Returns and documents maintained for recording the

day to day transactions as well as ensuring service

tax compliance in respect of his business/profession.

Maintain record of service provided, service tax

charged, amount received, proportionate service tax

on amount received, input services (paid for), inputs

and capital goods, receipt, consumption and

inventory as far as inputs and capital goods are

concerned.

Helpful in the event of any demand raised


CHECKLIST - CENTRALIZED

REGISTRATION

Proof of residence of all directors/partners

Address & Tel Nos. of the Centralised location

Proof of Address of the Centralised location

Centralized billing/Centralized Accounting System

List of branches/offices along with addresses, e-mail

& tel Nos.

Previous year’s audited balance sheet, if any

Reasons for seeking Centralized registration

ST.1 Form along with Registration certificate

Taxable services provided

12/3/2009

11


FORM ST-1 : e-Filing Procedure

• Create a User Name in www.aces.gov.inwebsite

• Password generated by the website shall be mailed

• Fill form ST – 1

• On submission, ST – 1 & provisional registration number is generated

• Submit the signed hard copy of the ST-1 generated along with other relevant documents


PENALTY PROVISIONS

IN CASE OF : PENALTY

Non registration or delayed registration

Rs. 1000/- u/s 77 of the Act.

Non payment or delayed payment of service tax

Mandatory penalty, not <Rs.200/- per day or @2% of such tax p.m, w-i-h, Penalty amt ≤ service tax payable

http://www.aces.gov.in/

12/3/2009

12


AMENDMENT / SURRENDER

Amendment :

Any change in ST – 1 info

Addition of new premises

Change in constitution

Any additional taxable service / new service bought under tax net

Within 30days intimate the AC / DCCE

Surrender :

Discontinuing / closure of operation

Value below taxable limit

Merger

Service notified exempt from a particular date


INVOICING / BILLING

The invoicing requirement is governed by Rule 4A of Service Tax Rules 1994.

The invoice is to be issued within 14 days of completion of taxable service or receipt of amount which ever is earlier.

Signed by such service provider or a person authorised by him.

Break up of the amount charged towards the service

Details as to exemption being claimed with reference to the concerned notification

12/3/2009

13


INVOICING / BILLING

The invoice shall be serially numbered and should contain the

following information

The name, address and registration no. of the service

provider.

The name and address of the service receiver

Date of raising of invoice

Details of the customer’s/client’s work order/purchase

order

Description, classification and value of taxable service

provided.

The amount of ST & Education cess/SHE Cess charged on

such service tax


RECORDS & ACCOUNTS

No specific mandatory records

Billing, accounting, accounting incoming

bills, tracking the date of payment and

receipt would be required to be

captured.

Software may help to minimize the

difficulty

12/3/2009

14


RETURNS


DUE DATES – SERVICE TAX

RETURN OF SERVICE TAX TO BE FILED HALF YEARLY

For 1st April to 30th September - 25th October

For 1st October to 31st March - 25th April

PAYMENT OF SERVICE TAX :

In case of Individual / HUF / Firms – within 5th of

subsequent month, following the quarter

Other assessees – within 5th of subsequent month

6th , if done electronically (50 Lakhs in P.Y)

By 31st March for the month / quarter of March

12/3/2009

15


REVISION OF FORM ST-3

Rule 7B provides for revision for Form ST – 3

To correct a mistake or omission

Within a period of 90 days from the date of

submission of the original return


PENALTY PROVISIONS

NON-FILING / DELAYED FILING OF RETURNS : ≤

Mandatory Penalty u/r 7C of the Service Tax Rules,

1994 i.e,

Upto 15 days Rs.500/-

Beyond 15 days but not later than 30 days

Rs.1,000/-

Beyond 30 days

Rs.1000/- + Rs. 100/- for per day from the 31st day till the date of furnishing the said return – Max – Rs 2,000/-

12/3/2009

16

FORM ST - 3

Payment of Service tax of more than Rs.5 Crores in cash or through account current or Advance Tax – Rs.1Crore -is a LARGE TAXPAYER.


FOR EXAMPLE : -

Service provided / received :

a) Erection, commissioning & installation

b) Transport of goods by road

Notification under which benefit for exemption is

available to this assessee are :

• No.13/2004 – ST w.r.t services provided to

Govt

• No.04/2004 – ST w.r.t services provided to

SEZ

Advance ST paid – Rs.10,300/- on 01/10/2009

12/3/2009

17

Incase of more than 1 service, for each taxable service; Point 3 to Pt.3 F (II) has to be repeated

Particulars Amount Received

a) Gross Amount for M/s.XYZ Pvt Ltd (incl export, exempted service, pure agent & EOU )

Rs.2,00,000/- (Out of this Rs.40,000/- received for period July 2004, Rs.60,000/- received for period Mar 05 & balance for period upto Feb 09)

b) Advance for service to be provided

Rs.40,000/-

c) Export of service Rs.30,000/-

d) Pure Agent Rs.50,000/-

e) Money equivalent of other services received

Rs.10,000/-

h) Service to Govt Rs.18,000/-

i) Service provided in SEZ Rs.7,000/-

12/3/2009

18

SERVICE I – ERECTION , COMMISSIONING & INSTALLATION -

AMT RECEIVED

ILLUSTRATION : -

Particulars Amount Billed

a) Gross Amount for M/s.XYZ Pvt Ltd (incl export, exempted service, pure agent & EOU )

Rs.2,00,000/-

b) Advance for service to be provided Rs.30,000/-

c) Export of service Rs.20,000/-

d) Pure Agent Rs. 40,000/-

e) Money equivalent of other services received

-

h) Service to Govt Rs.40,000/-

i) Service provided in SEZ Rs.60,000/-

SERVICE I – ERECTION, COMMISSIONG & INSTALLATION

12/3/2009

19

SERVICE I – ERECTION , COMMISSIONING &

INSTALLATION - AMT BILLED


SERVICE II – TRANSPORT OF GOODS BY ROAD

Amount paid : Rs.1,00,000/-

Amount accrued / : Rs.2,00,000/-

payable

Abatement claimed : 75%

As per notification No. 01/2006 Sr. No.6

12/3/2009

20

SERVICE II – TRANSPORT OF GOODS

BY ROAD – SERVICE RECIPIENT

12/3/2009

21

SERVICE TAX – PAYMENT DETAILS

GAR - 7

12/3/2009

22


ST - RULE 6(4A), 6(4B) &

6(4C)

Excess paid to credit of C.Govt, assessee may

adjust against ST Liability in month/qtr

Conditions –

Not involving interpretations of law, taxability,

classification, valuation, exemption notification

Adj - Limit of 1 lakh

Adj to be intimated to Supd of CE – 15 days

In case of renting of immovable property – excess

ST Paid – Property tax paid can be adjusted within

1 year. Intimation within 15 days.

SERVICE TAX – PAYMENT DETAILS –

CONTD..

12/3/2009

23


Cenvat Credit rules -

Rule 6(3) - options

Maintain Separate books of accounts for

taxable and non taxable service

Reverse 5% on Goods or 6% on services –

Non Taxable /Exempt

Formula based on PY transaction values –

Compute for one year. Within June 30th then

recompute and discharge short amount / take

credit of excess paid.

Interest from 30th June – 24% p.a

12/3/2009

24


INPUT CREDIT DETAILS

On Inputs (ST paid – Rs.1,000/-)

Capital Goods: - Purchase of machinery worth

Rs.75,000/- (incl Excise Duty of Rs.6000/-)

Payment of (input services) :

Telephone Charges : Rs.2,000/- (incl ST Rs.200/-)

Security Charges : Rs.3,000/- (incl ST Rs.300/-)

Credit received from input service distributor –

Rs.1,500/-

12/3/2009

25


E-filing of ST-3 return

File an application to Divisional AC/DC to provide TPIN

AC/DC will provide TPIN through e-mail

Create a user name in www.aces.gov.in website

Change the password

Login, attach file & upload return.

Condonation of Delay

Only for those using e-filing Facility first time

Assessee has faced technical difficulties

Delay of 1 month shall be condoned as per Circular

No. 71/2004

12/3/2009

26


OTHER ISSUES :-

Disclosure in Form ST – 3 ?

REFUND

REBATE

PENALTY PROVISIONS

IN CASE OF : PENALTY

Contravention of any of the provisions of the act or the rules

≤ Rs.1000/- u/s 77 of the Act

Suppression of the value of taxable services

From 100% to 200% of ST which was not levied or paid or erroneously refunded

Failure to make e-payment Rs.5,000/-

Failure to maintain proper books of accounts

Rs.5000/-

Failure to issue proper invoice/invoice with incomplete / incorrect details

Rs.5000/-

12/3/2009

27


COMMON ERRORS :

REGISTRATION

Failure to obtain endorsement on RC – for

new services

Acting on departmental views / oral

instructions

Failure to obtain registration for branches

providing service

Failure to intimate additional new

branches – centralised registration

Failure to intimate authorised signatories


RETURNS

Not bifurcating-more than one service (Sl No.3)

Incomplete returns / Not Filling ‘Not Applicable’

Form not signed by Authorised Signatory

Not filing within due dates leading to deptverification

Classification of Goods as input instead of capitalgoods

Wrong availment of abatements / exemptions

Service tax payment on billing without receivingconsideration

COMMON ERRORS :

12/3/2009

28


COMMON ERRORS :

Input tax not reversed on exempted goods / services –

5% / 6% respectively

Inconsistent methodology adopted for composite services

/ works contract.

Frequent delays in taking CENVAT credit forcing to pay

tax in cash.

The value adopted for payment of tax on goods without

considering the reimbursements of related expenditure.

Inquiry of unusual time gap between the bill date of

service & credit date.

Lack of reconciliation system

Q

&

A

12/3/2009

29

[email protected]

“ Whatever be the situation, if there is a fire in the

belly, nothing seems impossible”

service tax - registration & returns - bangalore icai · 2018-10-31 · service tax -...

Documents