Service Tax - REGISTRATION & RETURNS - Bangalore ICAI · 2018-10-31 · Service Tax - REGISTRATION...
Transcript of Service Tax - REGISTRATION & RETURNS - Bangalore ICAI · 2018-10-31 · Service Tax - REGISTRATION...
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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
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M/s. Shekar & Yathish, Chartered Accountants
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
M/s. Shekar & Yathish, Chartered Accountants
REGISTRATION
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M/s. Shekar & Yathish, Chartered Accountants
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
M/s. Shekar & Yathish, Chartered Accountants
REGISTRATION - SERVICE TAX
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
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M/s. Shekar & Yathish, Chartered Accountants
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Once opted cannot be withdrawn for such FY
M/s. Shekar & Yathish, Chartered Accountants
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?
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M/s. Shekar & Yathish, Chartered Accountants
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?
M/s. Shekar & Yathish, Chartered Accountants
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
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M/s. Shekar & Yathish, Chartered Accountants
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
M/s. Shekar & Yathish, Chartered Accountants
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
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M/s. Shekar & Yathish, Chartered Accountants
REGISTRATION - SERVICE TAX
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
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M/s. Shekar & Yathish, Chartered Accountants
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
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M/s. Shekar & Yathish, Chartered Accountants
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
M/s. Shekar & Yathish, Chartered Accountants
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
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M/s. Shekar & Yathish, Chartered Accountants
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
M/s. Shekar & Yathish, Chartered Accountants
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
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M/s. Shekar & Yathish, Chartered Accountants
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
M/s. Shekar & Yathish, Chartered Accountants
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
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M/s. Shekar & Yathish, Chartered Accountants
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
M/s. Shekar & Yathish, Chartered Accountants
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
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M/s. Shekar & Yathish, Chartered Accountants
RETURNS
M/s. Shekar & Yathish, Chartered Accountants
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
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M/s. Shekar & Yathish, Chartered Accountants
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
M/s. Shekar & Yathish, Chartered Accountants
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/-
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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.
M/s. Shekar & Yathish, Chartered Accountants
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
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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/-
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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
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SERVICE I – ERECTION , COMMISSIONING &
INSTALLATION - AMT BILLED
M/s. Shekar & Yathish, Chartered Accountants
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
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SERVICE II – TRANSPORT OF GOODS
BY ROAD – SERVICE RECIPIENT
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SERVICE TAX – PAYMENT DETAILS
GAR - 7
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M/s. Shekar & Yathish, Chartered Accountants
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..
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M/s. Shekar & Yathish, Chartered Accountants
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
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M/s. Shekar & Yathish, Chartered Accountants
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/-
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M/s. Shekar & Yathish, Chartered Accountants
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
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M/s. Shekar & Yathish, Chartered Accountants
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/-
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M/s. Shekar & Yathish, Chartered Accountants
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
M/s. Shekar & Yathish, Chartered Accountants
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 :
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M/s. Shekar & Yathish, Chartered Accountants
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
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