Key Procedural Changes in Service Tax and Excise

Numerous procedural changes regarding registration, payment and filing of returns have been proposed in Service Tax and Excise legislation through the Union Budget 2016-17. In line with increasing the ‘Ease of Doing Business in India’, the lawmakers have considerably simplified the compliance procedures to ensure that every hassle in way of business can be mitigated in due time.  This article decodes some of the key procedural changes proposed through the Budget 2016.

1. Service Tax

Facility of quarterly payment of Service Tax

At present, provisions of quarterly payment of Service tax and payment of Service tax on receipt basis is only available to individuals and partnership firms. Under Budget 2016 the benefit of such payments options have been extended to the One Person Company (OPC) whose aggregate value of services provided is up to ₹ 50 lakh in the previous financial year. This change will be effective from 1^st April 2016.

Filing of annual returns

Currently under Service tax legislation, there are only two half yearly returns required to be filed. Now as per the proposed changes under Budget 2016, Service tax assessee’s above a certain threshold will also be required to file an Annual return in addition to their normal returns. This change shall come into effect from 1st April, 2016. Thus, there will be three returns to be filed by a notified service tax assessee as compared to two earlier.

2. Excise

Simplification of registration procedure

The requirement of post registration physical verification of the factory / premises has been done away with. Further, an option of centralized Excise registration for jewellery manufacturers with centralized billing or accounting system has also been proposed.

Reduction in number of returns

At present 27 returns are to be filed by Central Excise assessee above specified threshold. As provided in Budget 2016, only 13 returns (12 Monthly and 1 Annual) will now be required to be filed resulting in considerable reduction in compliance hassles.

Revision of Excise returns now permissible

Currently only Service tax returns filed by assessee is allowed to be revised, whereas Excise legislation does not permit revision of returns. As proposed under the Finance Bill 2016, new provisions have been included to provide for revision of Excise returns as well. This is a welcome move which could be beneficial to Excise assessee.

No manual attestation for invoice copy meant for transporter

Invoice procedures for Transporters have been considerably simplified. At present, manual attestation of copy of digitally signed invoice was required. The said manual attestation of copy has been annulled through the amendments proposed in Budget 2016.

Conclusion

Considering the above changes in procedural aspects it seems that the government has taken favorable steps for further simplifying the procedures under Central Excise and Service Tax more in line with the idea of increasing the Ease of Doing Business in India.

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The authors are CA Sunny Kachalia – Manager and CA Mithun Surpuriya – Executive from SKP Business Consulting LLP.