THE SERVICE TAX RETURN PREPARER SCHEME, 2009 - AN OVERVIEW

[Mr. M. GOVINDARAJAN]

     In exercise of powers conferred by Sec.71(1) of the Finance Act, 1994 the Central Board of Excise and Customs framed the Service Tax Return Preparer Scheme, 2009 ('Scheme' for short) and notified vide Notification No.7/2009-ST, dated 3^rd February, 2009. 

Service Tax Return Preparer:

     The scheme is akin to the Income Tax Return Preparer Scheme and creates self employment opportunities for younger generation.   The term 'Service Tax Return Preparer'('STR preparer' for short) is defined as an individual who has been issued a Service Tax Return Preparer Certificate and a unique identification number by the Partner Organization to carry on the profession of preparing the return in accordance with the provisions of the scheme.  The educational qualification for such STR preparer is plus two and not more than thirty five years of age on the first day of October immediately preceding the day on which the applications are invited.   Exemption is given from age limit to any person who has superannuated/retired from the Department of Customs and Central Excise.

Authority and Agencies:

     For the purpose of the scheme the Board may designate the Director General of Service Tax or any other Directorate, as the case may be, to act as the Resource Center under this Scheme.  Further the scheme provides for the selection and authorization of an organization or agency to act as Partner organization by the Board or the Resource Centre.   An agreement is to be made with the Resource Centre and the Board or the Resource Centre as the case may be.

Responsibilities and functions of the Resource Centre:

     The Resource Centre shall be responsible for day to day administration of the scheme.   The functions of the Resource Centre shall include-

(i) to specify with the prior approval of the Board-

The number of persons to be enrolled during a financial year for training to act as Service Tax Return Preparers;

The number of centers for training and their location where at training to be imparted during a financial year;

The number of persons to be trained at each centre for training during a financial year.

(ii) to specify the curriculum and all other matters relating to the training of Service Tax Return preparers;

(iii) to maintain the particulars relating to the Service Tax Return Preparers as required in this scheme;

(iv) any other function which is assigned to it by the Board for the purposes of implementation of the scheme.

     The Resource Centre shall, in relation to STR preparer, shall itself maintain the particulars, or direct the Partner Organization to maintain such particulars, which may be necessary to assess his performance.  The Resource Centre may issue instructions to the STR preparers from time to time.

Selection and responsibilities of the Partner Organization:

     The Board shall select a Partner Organization to partner with the Resource Centre for implementation of the scheme.   The Partner Organization shall function under the overall guidance and control of the Resource Centre.   It should follow the instructions issued to it by the Resource Centre from time to time about implementation of the scheme.

     The Partner Organization shall be responsible to carry out the activities which it is required to carry out.    It shall maintain the profile of the STR preparers during their training and monitor their performance as STR preparers.   It shall also perform its functions to the satisfaction of the Resource Centre.

     The Board may, on the recommendation of the Resource Centre, terminate the agreement with the Partner Organization and may enter into an agreement with any other Partner Organization or assign its functions to the Resource Centre, if in its opinion, the Partner Organization has failed to perform its functions properly.

Enrollment, training and certification to persons to act as Service Tax Return Preparers:

     The Partner Organization shall invite applications from the eligible persons under this scheme or any person who has been issued Tax Return Preparer Certificate under the Tax Return Preparer Scheme, 2006 under Sec. 139B(1) of Income Tax Act, 1961.  In the application form the person applying shall indicate the preferences for centres where at training may be imparted to him.

     The Partner Organization shall-

In accordance with the criteria and conditions laid down by the Resource Centre with the prior approval of the Board, carry out the screening of the applications so received and select the persons to appear as in a test for their enrolment;

Carry out a test, if required, for enrollment of persons who have been selected on screening;

Enroll the persons who qualify for enrollment separately for each centre;

Train the persons so enrolled in accordance with the curriculum provided by the Resource Centre;

After completion of training, conduct an examination of the enrolled persons in accordance with the procedure laid down by the Resource Centre;

Issue a Service Tax Return Preparer Certificate and a Unique Identification Number to the persons who are declared as successful in the examination so conducted.

Role of Assessee:

     Any assessee, may at his option furnish his return after getting it prepared through a Service Tax Return Preparer.  The assessee shall not furnish a revised service tax return under Rule 7B of the rules through a STR Preparer unless he has furnished the original return through such or any other STR Preparer. 

     An assessee opting to furnish his return under scheme shall give his consent to any STR preparer to prepare and furnish his return and before verifying and signing the return he shall ensure that the facts mentioned in the return are true and correct.

Duties and Obligations of the Service Tax Return Preparer:

     The STR preparer shall-

Prepare the return with due diligence;

Affix his signature on the return prepared by him;

Furnish the return to the Superintendent of the Central Excise having jurisdiction over the assessee or to such other person as may be directed by the Resource Centre with the approval of the Board and hand over the acknowledgment of having furnished the return to the concerned eligible person;

Hand over a copy of the return to the person whose return is prepared and furnished by him;

Retain a copy of the acknowledgement of having furnished by return;

In respect of returns prepared and furnished by him maintain record of the following, namely:

• The name of assesses whose returns have been prepared and furnished by him during that month;
• The Service Tax Code number and premises code of such assesses;
• Period for which return is filed;
• Date of furnishing the return;
• Authority with whom return is filed;
• Amount of tax payable;
• Amount of tax paid;
• The fee charged and received by him;

Furnish a statement of particulars for every month on or before the 7^th day of the immediately following month to the Resource Centre.

Incentive payable to STR preparers:

     An assessee shall pay a fee as may be mutually agreed upon between an assessee and the STR preparer.   The Board recommends a fee of Rs.1000/- per return prepared by STR preparer.

Withdrawal of Certificate:

     The Resource Centre may warn a STR preparer for the deficiencies in his work and his misconduct and may proceed for cancellation of his certificate in any one or more of the following circumstances, namely:-

If he fails to give a copy of the return to the assessee;

If he prepares a return but fails to affix his signature thereon;

If he fails to furnish his name and unique identification number in the return prepared by him;

If he fails to enter any information made available to him by the assessee, correctly in the return prepared by him;

If he makes repeated mistakes relating to computation of service tax in the returns prepared by him;

If he is engaged in any financial irregularity, forgery or fraud;

If he is willfully attempts to furnish incorrect information in return;

If he is involved in any other irregularity which, in the opinion of the Chief Commissioner or the Commissioner of Central Excise, is grave in nature;

If he fails to comply with the directions issued by the Resource Centre from time to time;

If he fails to upgrade his skill as required by the Resource Centre from time to time.