st viii basic procedure and penalties dr. priyanka ostwal

8/19/2019 ST VIII Basic Procedure and Penalties Dr. Priyanka Ostwal

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eated By Jigar Sarvaiya 2/23/2016

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Basic Procedure

Basic Procedure

Created By:

CA Priyanka Ostwal(Priyanka.ostwal@gmail .com)

Procedure to be Followed by Service

Provider

1. Preparation of Invoices

2. Registration

3. Maintenance of Records

4. Payment of Service Tax

5. Submission of Service Tax Return

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Preparation of Invoices

Every person providing taxable services shall issue aninvoice/bill/challan not later than 30 days from the dateof completion of service or receipt of payment, whicheveris earlier.

However, in case of ban king company , invoice can beissued within 45 days of completion of service or receiptof payment whichever is ear lier.

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PreParation of invoices: Main Points…

1. Invoice shall be issued for service provided or agreed to be provided.

2. The invoice needs to indicate the value of service provided or agre ed t o be provided

3. For continuous services , invoice or challan shall be issued within 30 daysfrom last date of that period

4. The invoice should be signed by authorized person or provider of service.

5. Bill/Invoice/Challan should be serially numbered

6. Invoice should contain the details of person providing taxable services, person receivin g taxa ble services, descripti on of services an d service tax payable

7. For banking company it is not necessary to serially number the invoice andalso the address of the recipient of service

8. Invoice is not required in ca se of receipt of excess payment upto Rs. 1,000

9. In case of GTA , invoice should also contain details of consignment note

number, date, gross rate of consignment and other details.5

REGISTRATION REQUIREMENTSSection 69 read with Rule 4

• Every Person who is liable to payservice tax, An Input ServiceDistributor and every provider oftaxable service whose aggregatevalue of taxable service in a financialyear exceeds Rs. 9 Lakh.

• Application shall be filed toSuperintendent of Central Excise

• Application is to be in form No. ST-1

• Within 30 days

• Registration shall be issued within 7days in form ST-2

Person who must manda torilyobtain registration

1) Every person liable to pay service tax

2) Any provider of taxable services whose aggregatevalue of taxable service in a financial year exceeds Rs. 9 lacs

3) An Input Service Distributor

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Application for r egistration in F orm ST-1 to be made toconcerned Superintendent of Centra l Excise.

• The application for registration shall be made within 30 days,from the date on which the levy of service tax is brought intoforce in respect of the relevant services or of thecommencement of business where services has already beenlevied .

Contd …

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Contd …

• Registration Certificate is granted in Form ST-2 within 7days from the date of receipt of intimation.In case theregistration certificate is not issued within seven days, theregistration applied for is deemed to have been granted.(Rule 4(5) of the STR, 1994)

CBEC vide Circular no. 35/3/2003 has made it compulsory for every assessee to obtain the Service Tax Code number which is a 15 digit alpha numeric no. based on the PAN

• Assessee providing more than one taxable service shouldmention in single application, all the taxable services

provided by him. Rule 4(4), Service Tax Rule,1994.9

DocumentS to be Submitted with ST 1

(a) Proof of address of the premisesoffice sought to be registered

(b) PAN number of the assessee

(c) List of Branches offices or premises ofthe assessee

(d) Brief note on accounting systemadopted by the assessee

(e) Branch-wise series of i nvoicesmaintained along with a sample copythereof

(f) Previous years audited balance sheetalong with gross trial balance ofdifferent branches

(g) Details of records accountsmaintained at different branches andCentral Office

(h) Bank account numbers of theBranches and Central Office throughwhich the receipts are deposited,transacted.

I amconfused

w hat documentto be filedwith ST-1

Provision for CentralizedRegistration

Service providers having centralised accounting orcentralised billing system, at their option, can haveCentralised registration at one or more places.

Commissioner of Central Excise / Service Tax in whose jurisdiction centralised account or billing office of theassesses exists, is empowered to grant centralisedregistration.

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Payment of Service Tax th rough G.A.R. 7

Quarterly Payment

Other than Individual/FirmIndividual/Firm

Monthly Payment

Quarter Endingon 31 st March Other Quarters Month of March Other Months

Upto 31 st March 5th

of the Monthfollowing Quarter Upto 31 st March 5th

of theNext Month

E – Payment of Service Tax

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Payment of Service tax: Othe r

Points1. e-Payment of Service Tax

2. Payment by Cheque (to be deposited in bank on or beforethe due date)

3. Adjustment of Service Tax (Assessee can adjust the excessservice tax in subsequent period)

4. Provisional payment of service tax

5. Rounding off (round off 50 paise or more to one rupee)

6. Payment of service tax collected in excess to be paid to theCentral Government (Interest @18%, for SSP @15%)

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Return of Service Tax

Return of Service Tax to befiled Half Yearly – ST-3

For 1s t April to 30th SeptemberDue Date 25th October

For 1st October to 31st Mar chDue Date 25th April

Content of Return

General Information like financial year, half-yearly period, nameof the assessee, registration n umber of pr emises and categories oftaxable services for which retur n is being filed

Month wise details of payment of service tax

Details of other pa yments

CENVAT Credit details of service tax provider/ recipient

Content of Return: Other

Points

Fir st Return (List of all accounts mainta ined by the assesse)

Return in case of multiple service providers (Only one retur n)

Return when no services are provided (Nil Return)

Manda tory e-filling w.e.f October 1, 2011

Procedure for e-f iling return


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E filing of ST 3 return

Basic Requirement• PAN Based Service Tax Code (STC)• File return on www.servicetaxefiling.nic.in

Condo nation of DelayOnly for those using e-filing Facility first timeAssessee has faced technical difficultiesDelay of 1 month shall be condoned as per CircularNo. 71/2004

Failure to Pay Service Tax• Interest(sec. 75) :-

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Period of Delay Rate of Simple Interest (on perannum basis)

Upto 6 Months 18%

More than 6 months and upto 1 year 18% for fir st 6 months and 24% for delaybeyond 6 months

More than 1 Year 18% for first 6 months, 24% for periodbeyond 6 months upto 1 year, 30% forany delay beyond 1 year

Penalties Under Service Tax

Penalty(sec. 76) :- Applicable if service tax is not paid or paid a fter duedate or short paid or erroneously refunded ( not because of fraud,collusion, wilful mis-statement, suppression of facts or contraventionof any provision of law pertaining to service tax). Penalty will becalculated as under:

• Penalty not to exceed 10 % of service tax amount involved in suchcases,

• No penalty is to be paid if service tax and interest is paid within 30days of service of notice under section 73 (1)

• A reduced penalty of 25% of the penalty imposed by the CentralExcise Officer by way of an order is to be paid if the service tax,interest and reduced penalty is paid within 30 days of date of service

of such order.19

Penalties Under Service Tax

Penalty(sec. 78) :- Applicable if service tax is not paid or paid a fter duedate or short paid or erroneously refunded ( because of fraud,collusion, wilful mis-statement, suppression of facts or contraventionof any provision of law pertaining to service tax). Penalty will becalculated as under:

• Penalty shall be 100% of service tax amount involved in such cases,

• Penalty equal to 15% of service tax amount if service tax, interest and

reduced penalty is paid within 30 days of service of issue of showcause notice in this regard

• A reduced penalty of 25% of the penalty imposed by the CentralExcise Officer by way of an order is to be paid if the service tax,interest and reduced penalty is paid within 30 days of date of serviceof such order.

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Penalty Under Service Tax: Contd..Penalty for not Obtaining Registration :-If a person who is required to obtain registration, fails to takeregistration in accordance with the provisions of law, he shall

be liable to pay penalty which may extend to:a. Rs. 10,000

b. Rs. 200 per day during which default continues,

Whichever is higher

Penalty for non-maintenance of books of account anddocuments:May Extend to Rs. 10,000

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Penalty Under Service Tax: Contd..Penalty for not furnishing information required :-If a person who is required to obtain registration, fails to takeregistration in accordance with the provisions of law, he shall

be liable to pay penalty which may extend to:a. Rs. 10,000

b. Rs. 200 per day during which default continues,

Whichever is higher

Penalty for failure to pay tax electronically when required:May Extend to Rs. 10,000

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Penalty Under Service Tax: Contd..Penalty for issuing incorrect invoice or not accounting invoices in books

of account :-May Extend to Rs. 10,000

Penalty for offences by director, etc of company:Penalty may Extend to Rs. 1,00,000 in any of the followingcontraventions:

a. Evasion of service tax; or b. Issuance of invoice, bill or challan without provision of taxable

service; orc. Availment and utilization of credit of taxes or duty without actual

receipt of taxable service or excisable goods.d. Failure to pay any amount collected as service tax to the credit of

Central Government beyond a period of 6 months from the duedate of payment

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Period Fine/Penalty Up to 15 days Rs.500/- 16 to 30 days Rs.1000/-

Beyond 30 days

Rs.1000/- plus Rs.100/- per dayfrom the 31st day onwards tilldate of furnishing return (maxRs 20,000)

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Penalty Under Service Tax: Contd..

Penalty for Late Filing of Return :-


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Voluntary Compliance EncouragementScheme, 2013 (VCES)The Scheme came into force from May 10, 2013

Defaulters will be required to make a truthful declaration of all his pending tax dues (from October 1, 2007 to December 31, 2012) and

pay at least 50% of that before December 31, 2013.

And pay the balance of 50% before June 30, 2014 (without interest)

Alternatively, Balance 50% can be paid by December 31, 2014 (withinterest from July 1, 2014 till date of payment)

On compliance the person will have immunity from interest, penaltiesan other proceedings

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Role of Chartered Accountants

Advising Clients

Procedural Requirements

Personal Representation

Certification and Audit

Constant updation of law and provisions

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st viii basic procedure and penalties dr. priyanka ostwal

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