TaxTMI 
TaxTMI 
Procedural issues in Service Tax-circular-reg.
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....rifications/ instructions have become redundant and anachronistic, new issues have arisen on account of changes in law and procedure. This circular aims to consolidate the procedural issues relating to service tax, including those relating to availment and utilization of CENVAT credit. This circular supersedesall previous circulars/clarifications/instructions issued on these subjects. It is, however, clarified that this circular is intended only to clarify the scope of the Act and the rules, and therefore, in the event of any inadvertent inconsistency or contradiction between this circular and the provisions of the Act or the rules, the latter shall prevail. 2. Registration: 2.1 As per the provisions of section 69 of the Act and rule 4 of the Service Tax Rules, 1994 (hereinafter called the Rules), every person providing a taxable service and liable to pay service tax is required to register with the Central Excise/Service Tax department (hereinafter called the department). Further, in a few cases liability to pay service tax has been shifted to the service receiver or other specified person, in terms of section 68(2) of the Act. These cas....
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....ice is required to take only one single registration. He should indicate all taxable services provided by him in Form ST-1. 2.5 Any person liable to pay service tax, who,- (a) provides taxable service from more than one premises; (b) receives taxable services in more than one premises; or (c) has more than one premises engaged in relation to such taxable service, may seek centralised registration, provided he does centralised billing or maintains centralised accounting in respect of such taxable services in a premises. In certain cases the centralization can be at the zonal/regional level. In such case, each of such offices is to be registered individually. Such registrations are to be granted by the jurisdictional Commissioner where such offices/establishments are located. 2.6 The registration certificate will be granted by the department, in Form ST-2, within seven days of filing of an application complete and properly filled up. In case registration certificate is not issued within seven days, the registration is deemed to have been granted. Registration No., also known as 'Service Tax Code (STC)' is a fifteen digit PAN based number. Fi....
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....ose the option of e-payment of service tax. On choosing this option, the service taxpayer would be guided to the e-payment portal wherein he would fill the challan for payment of service tax and would authorize payment of service tax by way of debit to his account. Thereafter, a copy of the acknowledgement would be generated for the records of the service taxpayer. Subsequently, the bank would generate copies of challan and send a copy each to the Pay and Accounts Officer (PAO) and the department. 4. Mandatory e-payment of service tax 4.1 The e-payment of service tax has been made mandatory w.e.f . 1.10.2006, (vide sub-rule (2) of rule 6 of the Rules), for all assessees who have paid (in cash plus through CENVAT Credit) a service tax amounting to Rs. 50 lakh or more in the preceding financial year or in the current financial year. The latter type of service taxpayers shall make any further payment of service tax in cash (i.e. other than through credit), only through e-payment. 4.2 In case a taxpayer faces any procedural problems, he may contact the jurisdictional service tax/ central excise office or the jurisdictional Commissioner, who would adv....
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....he taxable service has been received and the name, address and registration no. of the input service distributor as well as of the recipient of the credit. The amount of credit distributed shall also be mentioned. 5.3 For service providers providing 'banking & other financial services', certain relaxations are available. For such service providers, the invoice need not be serially numbered. They are also exempted from mentioning the address of the service receiver. Similar dispensation is available for input service distributors of such type of service providers. 5.4 For providers of taxable service of transport of goods by road (i.e. goods transport agency) the invoice/bill/challan should, in addition to the general information required (i.e. as mentioned in para 5.1), also contain the consignment note number, date and gross weight of the consignment. 5.5 Rule 4B of the Rules prescribes that the goods transport agency shall issue a consignment note, which would be serially numbered and would contain the names of the consignor and consignee, the vehicle registration number, details of goods transported, details of place of origin and destination, and t....
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....unicate the 'User ID', and 'password' along with technical details required for accessing the relevant site and the procedure for making entries and other guidance as may be necessary to the taxpayer by e-mail. While filing the return electronically, the service taxpayer must file details as contained in Form ST-3 and that of duty paying challans. On submission of the completed return, a key number and an acknowledgement would be generated by the system along with a copy of Form ST-3 and Challan, which could be printed by the service taxpayer for his records. In case of any difficulty faced in e-filing, the service taxpayer may send an e-mail to the address specified by the Commissioner, explaining the difficulties and if a reply is not received within two days, he may send an e-mail to [email protected] 6.4 Delay in filing of return: The return is required to be filed by the stipulated date as mentioned at para 6.1 above. Delay in filing of return attracts late fee. The late fee presently prescribed vide rule 7C of the Rules, is (a) Rs 500 for delay upto 15 days; (b) Rs 1000 for delay between 15 days and 30 days; and (c) Rs 1000 plus Rs 100 per day....
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....rt by road, as a consignor or as a consignee? COMMENTS: In terms of rule 3 (4) of the Rules, CENVAT credit can be utilized for the following payments: (a) any duty of excise payable on any final product; (b) .................................................. (c) .................................................. (d) service tax on any output service In terms of the CENVAT Credit Rules, 'output service' means any taxable service provided by the provider of taxable service to the service receiver. Further, the definition of 'provider of taxable service' includes a person liable to pay service tax. Therefore, reading the two definitions in conjunction, it is clear that, to form 'output service', taxable service has to be actually provided by the 'provider of taxable service'. Even if due to a legal fiction, ....
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.... be called as 'input service' and, thus, the service tax paid (by any of the persons mentioned above) on it would be eligible as credit to the receiver if he is either a manufacturer of excisable goods or a provider of taxable service. (c) ISSUE: Up to what stage a manufacturer/consignor can take credit on the service tax paid on goods transport by road? COMMENTS: This issue has been examined in great detail by the CESTAT in the case of M/s Gujarat Ambuja Cements Ltd. vs CCE, Ludhiana [2007 (006) STR 0249 Tri-D]. In this case, CESTAT has made the following observations:- "the post sale transport of manufactured goods is not an input for the manufacturer/consignor. The two clauses in the definition of 'input services' take care to circumscribe input credit by stating that service used in relation to the clearance from the place of removal and service used for outward transportation upto the place of removal are to be treated as input service. The first clause does not mention transport service in particular. The second clause restricts transport service credit upto the place of removal. When these two clauses are read together, it becomes clear that transport ser....
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.... paid depot (from where the excisable goods are sold, after their clearance from the factory), the determination of the 'place of removal' does not pose much problem. However, there may be situations where the manufacturer /consignor may claim that the sale has taken place at the destination point because in terms of the sale contract /agreement (i) the ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step; (ii) the seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) the freight charges were an integral part of the price of goods. In such cases, the credit of the service tax paid on the transportation up to such place of sale would be admissible if it can be established by the claimant of such credit that the sale and the transfer of property in goods (in terms of the definition as under section 2 of the Central Excise Act, 1944 as also in terms of the provisions under the Sale of Goods Act, 1930) occurred at the said place. 8.3 A doubt has been raised regarding admissibility of CENV....
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....006). 11 Audit 11.1 The selective audit of service taxpayers and other assessees like input service distributors, may be done by the jurisdictional central excise officer (authorized for the purpose) or by an audit party deputed by the Comptroller and Auditor General of India. Rule 5 of the Rules makes it mandatory for every assessee to make available the records, on demand, for inspection and examination to such authorized person/audit party. 12. Adjudication of cases 12.1 Section 73 of the Act deals with adjudication of cases of short-levy or non-levy of service tax or service tax short paid or not paid or erroneously refunded. For quick settlement of disputes, this section prescribes that (i) in other cases involving fraud, collusions, wilful misstatement and suppression of facts etc., the dispute could be settled by making payment of the service tax amount specified in the notice along with interest and penalty equal to 25% of service tax amount, within thirty days of issue of show cause notice; (ii) and in any other case the person chargeable to service tax, or to whom service tax has been erroneously refunded, may make payment....
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....entral Board of Excise & Customs (CBEC) has directed that in respect of demands for an amount upto one thousand rupees towards short payment/non-payment of service tax, if the service provider, on the default being pointed out, pays the service tax along with interest within a period of one month of the default in payment, the penalty should be waived, taking recourse to the provisions under section 80 of the Act. In other cases, i.e. where amount of service tax involved is over Rs one thousand, penal action prescribed under sections 76, 77 and 79 would be attracted. 13 Revision of orders: 13.1 The adjudication order passed by the officers subordinate to the Commissioner of Service Tax can be revised by the Commissioner after causing such inquiry as he deems fit, in terms of section 84 of the Act. The limitation period for issuing such revisional order is two years from the date on which the original order was passed. However, any issue against which an appeal has been filed by the service taxpayer before Commissioner (Appeals) cannot be revised. Thus, if an order deals with several issues and the party files an appeal only in respect of a few issues, t....