Filing of ST-3 Return- difficulty for construction sector

[Saju Philip]

dear all

the new ST-3 return for the period July-sep 2012, make it mandatory for the assessee to furnish the "Source documents " with respect to the adjustments under Rule 6(3). What is asked to be shown is that the details of challans by which the said amount was actually paid. We have to show the challan no., date and amount. it is not clear whether the amount to be shown is the amount adjusted or the total amount paid by that challan. It might not be a big problem for other service providers where the invoices issued might not be large in number and no. of clients are not so huge. 

But in CONSTRUCTION INDUSTRY, it is not the case. The cancellations are very often happens. The amount adjusted under Rule 6(3) may contain cancellation of say about 100 flats and that too payments were received in 1-4 installments. That means for each client who has cancelled the flat the tax might have been paid in 2-3 challans. If there are say 100 canellations one can imagine how many entries are required. Further it requires tremendous back office work to correlate the cancellations with the challans. 

Any Solutions?.

regards

CS Saju Philip

AI Summary

Source document requirement for Rule 6(3) adjustments increases compliance and reconciliation burden on construction service providers.
The ST-3 return requires service providers claiming adjustments under Rule 6(3) to record the challan number, date and amount as source documents evidencing the tax payments being adjusted against refunds for cancellations or non provision of services. In the construction sector, frequent cancellations and staged receipts across multiple challans create a substantial reconciliation burden to trace which portions of historical challans relate to refunded transactions and to ascertain amounts previously adjusted in earlier returns.