PROCEDURAL CHANGES IN SERVICE TAX REGIME

[Mr. M. GOVINDARAJAN]

Everyone knows that there was a sea change in service tax regime with effect from 01.07.2012. The existing procedure has also been changed due to this. The same is discussed in this article.

REGISTRATION:

There were nearly 109 services were covered under the service tax net and each service was to be registered with the Service tax authorities. Up to 30.06.2012 the Service Tax Registration was issued specifying the service. From 01.07.2012 onwards, positive list of service tax has been dispensed with and negative list was introduced.  Hence, hereafter the Registration Certificate will be issued by the Department specifying the service as OTHER THAN IN THE NEGATIVE LIST.

Due to the introduction of negative list the existing service providers are required to verify the category of services provided by them.  They are required to apply for amendment in Registration certificate by filing amended ST-1 application specifying the category of service as ‘Other than in the negative list’. After applying the same the copy of required documents (in duplicate and self attested) with a covering letter clearly mentioning the category of all services provided/received by them. They may also file the profile to the Range Officer. 

The assessee may do the following activities which will help them to fill the details in ST-3 return which is going to be changed by the Department:

• Prepare a work sheet (date wise/month wise) containing the following details:
  • Name of the service receiver;
  • Date of completion of part of the work for which bill has been raised;
  • Invoice No. /Bill No. & date;
  • Amount claimed;
  • Amount received;
  • Date of receipt of the amount with cheque No. and date;
  • Abatement amount claimed if any (mention the sl.no. in the abatement notification);
  • Service tax payment challan No. & date with amount paid;
  • BSR code number of the bank through which the service tax has been paid.

ACCOUNTING CODE:

Prior to 01.07.2012 each service was allotted accounting code for payment of service tax. In respect of the services rendered prior to 01.07.2012 the service tax may be pending to be paid. The same has to be paid under the Accounting codes of the respective services. After 01.07.2012 accounting code is only one due to the introduction of negative list.  The new Accounting Codes are as follows:

Description	Accounting Code
Service Tax for all taxable services	00441089
Primary Edu.cess	00440298
Sec & Hr. Sec. Edu. cess	00440426
Other receipts	00441090
Penalty	00441093

EXEMPTION:

Threshold exemption of Rs.10 lakhs is not available for the service receivers who are liable to pay service tax under reverse charge mechanism. The liability of the service provider and service recipient are different and independent of each other. As a service provider he shall not be obliged to pay any tax. But as the service recipient he has to pay service tax under the partial reverse charge mechanism.

LIMITATION FOR RECOVERY OF TAX:

The limitation prescribed under Section 73 of the Finance Act, 1994, one year is increased to eighteen months to issue show cause notice by the department in case of failure to recover or pay or short paid or short recovered or erroneously refunded.

ISSUE OF BILLS:

Notification No. 3/2012-ST, dated 17.3.2012 increased the time limit of 14 days to thirty days for the issue of bills under Rule 4A of Service Tax Rules, 1994.  Wherever the provider of taxable service receives an amount up to rupees one thousand in excess of the amount indicated in the invoice and the provider of taxable service has opted to determine the point of taxation based on the option as given in Point of Taxation Rules, 2011, no invoice is required to be issued to such extent. taxmanagementindia.com

ADJUSTMENT OF EXCESS PAYMENT OF SERVICE TAX:

The adjustment of excess amount paid, under sub-rule (4A), shall be subject to the condition that the excess amount paid is on account of reasons not involving interpretation of law, taxability, classification, valuation or applicability of any exemption notification.  The following types of adjustments prevailing before 01.04.2012 are dispensed with:

-  excess amount paid by an assessee registered under sub-rule (2) of rule 4, on account of delayed receipt of details of payments towards taxable services may be adjusted without monetary limit,

-  in cases other than specified in clause (ii) above, the excess amount paid may be adjusted with a monetary limit of rupees two lakh rupees for a relevant month or quarter, as the case may be,

-   the  details  and  reasons  for  such  adjustment  shall  be  intimated  to  the jurisdictional Superintendent of Central Excise within a period of fifteen days from the date of such adjustment.”

FILING OF RETURN:

Form ‘ST-3’ required to be submitted by the 25th day of October, 2012 shall cover the period between 1st April to 30th June, 2012 only.