SERVICE TAX RETURN PREPARER'S SCHEME

[Dr. Sanjiv Agarwal]

The Central Board of Excise and Customs has notified Service Tax Return Preparer Scheme, 2009 vide Notifiction No 7/2009-ST dated 3.2.2009. The Scheme (STRPs) has come into force w.ef. 3.2.2009 and has been framed and notified in pursuance to provisions of section 71 of the Finance Act, 1994.

Statutory Provisions (Section 71)

(1) Without prejudice to the provisions of section 70, the Board may, by notification in the Official Gazette, frame a Scheme for the purposes of enabling any person or class of persons to prepare and furnish a return under section 70, and authorise a Service Tax Return Preparer to act as such under the Scheme.

(2) A Service Tax Return Preparer shall assist the person or class of persons to prepare and furnish the return in such manner as may be specified in the Scheme framed under this section.

(3) For the purposes of this section,—

(a) "Service Tax Return Preparer" means any individual, who has been authorised to act as a Service Tax Return Preparer under the Scheme framed under this section;

(b) "person or class of persons" means such person, as may be specified in the Scheme, who is required to furnish a return required to be filed under section 70.

(4) The Scheme framed by the Board under this section may provide for the following, namely:—

(a) the manner in which and the period for which the Service Tax Return Preparer shall be authorised under sub-section (1);

(b) the educational and other qualifications to be possessed, and the training and other conditions required to be fulfilled, by a person to act as a Service Tax Return Preparer;

(c) the code of conduct for the Service Tax Return Preparer;

(d) the duties and obligations of the Service Tax Return Preparer;

(e) the circumstances under which the authorisation given to a Service Tax Return Preparer may be withdrawn;

(f) any other matter which is required to be, or may be, specified by the Scheme for the purposes of this section.]

The Service Tax Return Preparer Scheme (STRPS) has been announced in Union Budget 2008-09 to help service providers and service tax payers and also to bring in new assessees under the service tax fold. It may be noted that in 2007, Government had introduced the similar scheme for income tax wherever about 3700 tax return preparers were trained in 2007.

Such persons may be allowed to file service tax returns of both individuals as well as corporate assessees after requisite training. CBEC has set up a Committee to formulate the modalities for implementation of STRPS.

According to Finance Act, 2008 provisions which inserted the scheme i.e. STRPS will be framed by the Board which may cover any person or class of persons. The main role of STRP's would be to prepare and furnish service tax returns as provided under section 70. The scheme to be framed will specify the persons to whom STRP's would assist or provide services.

The Board (CBEC) has been empowered to frame a scheme which will be notified in the Official Gazette for filing service tax returns. The manner of furnishing the returns will be prescribed in the scheme.

Sub-section (2) provides that STRP shall assist the person (service provider or person liable to pay service tax) or class of persons specified by the scheme to —

(a) prepare the return, and

(b) furnish the return.

Thus, the job of STRP would be two fold - to assist in preparing the return and to assist in furnishing of the return.

Sub-section (3) provides as to who will be 'person' or 'STRP.' Service tax return preparer has been defined to mean any person who is an individual and authorized to act as a STRP under the scheme. Thus, an STRP has essentially to be —

(a) an individual only

(b) a person authorized to act under STRPS.

STRP can therefore, not be a firm or company or body of individuals. He has to be an individual only duly authorized to act as such under STRPS. 'Person' or 'class of persons' to whom STRP's would be required to assist shall be specified in the scheme. These may be individuals or otherwise but will be persons who are liable to file service tax returns under section 70 of the Finance Act, 1994.

Sub-section (4) states that the scheme to be framed by the Board shall provide for the following —

(a) the manner in which and the period for which the Service tax Return Preparer shall be authorized under sub-section (1);

(b) the educational and other qualifications to be possessed, and the training and other conditions required to be fulfilled, by a person to act as a Service Tax Return Preparer;

(c) the code of conduct for the Service Tax Return Preparer;

(d) the duties and obligations of the Service Tax Return Preparer;

(e) the circumstances under which the authorization given to a Service Tax Return Preparer may be withdrawn;

(f) any other matter which is required to be, or may be specified by the Scheme for the purposes of this section.

These stipulations shall regulate and govern the conduct and working of STRP's

"CBEC has clarified vide Circular No. F. No. 334/1/2008/-TRU dated 29.2.2008 as follows —

"9.3  To facilitate small taxpayers in filing and furnishing income tax returns, a scheme known as Tax Return Preparers Scheme was announced by the Finance Minister in the Budget, 2006-07. In order to facilitate small service taxpayers in filing of service tax returns, a similar scheme has been proposed in the Budget, 2008-09. Section 71 has been incorporated for this purpose."

STRPs Scheme, 2009

Vide Notification No 7/2009-ST dated 3.2.2009, the scheme has been notified by the Central Government. The scheme is called Service Tax Return Preparer Scheme, 2009 and is applicable to all the assessees unless other wise provided. The scheme provides for the following provisions-

(i) application and date of commencement

(ii) definition of partner organization, resource centre, return and service tax return preparer  (STRP)

(iii) educational qualification for STRP

(iv) enrolment, training and certificates to person to act as STRPs

(v) preparation of and furnishing the service tax return by STRP

(vi) duties and obligation of assessees

(vii) duties and obligation of STRPs

(viii) selection and responsibilities of the partner organization

(ix) incentive to STRPs

(x) maintenance of particulars relating to STRPs

(xi) withdrawal of certificate given to STRP

(xii) responsibilities and function of resource centre

The STRP scheme is aimed to facilitate hassle free filing of service tax returns. The STRP network has been established all over India with adequate training and infrastructure. The services of STRPs can be availed by assessee on mutually agreed fee. However, CBEC has recommended a fee of Rs 1000 per return.

Service tax Returns Preparer (STRP)

 Service Tax Return Peaparer means any individual who has been issued a service tax return preaper certificate and a unique identification number under clause (9) of paragraph 4 of this scheme by the partner organization to carry on the profession of preparing the retunes of income in accordance with the provision of said scheme.

Any individual who has successfully completed education up to senior secondary level, under 10+2 education system. Shall be eligible to eligible to become a service tax return preparer.

Partner Organization

Partner organization means an organization or agency selected by Board and with whom an agreement has been entered into by the Board or the resource centre authorizing it to act as partner organization under this Scheme.

Resource Centre

Resource Center means the Directorate General of Service tax or any other Directorate, as the case may be, designated by the Board to act as the resource centre under this scheme.

Duties and obligation of assessees

Under STRPS, an assessee has a obligation to -

(a) give his consent to STRP to prepare and furnish his return

(b) ensure that the facts mentioned in the return are true and correct

(c) verify and sign the return

(d) pay the agreed fee to STRP

Role and responsibilities of partners organization  

Role

(1)  For the purpose of enrolment, training and certification to a person to act as Service Tax Return Preparer, the Partner Organization shall invite applications from-

(a) any person who has been issued Tax Return Preparer Certificate under the Tax Return Preparer Scheme, 2006 framed under sub-sec (1) of section 139B of the Income-tax Act, 1961, or

(b) any other Indian citizen having educational qualification referred to in paragraph 3 and desires to act as Service Tax Return Preparer:

(2) A person who is aged more than thirty-five years on the first day of October immediately preceding the day on which applications arc invited shall not be eligible to apply. However, the age restriction shall not apply to any person who has superannuated/retired from the Department of Customs and Central Excise.

(3) The person applying to act as Service Tax Return Preparer shall indicate in the application form the preferences for centers where at training may be imparted to him.

(4) The partner organisation shall in accordance with the criteria and condition laid down by the resource centre with the prior approval of the Board, carry out the screening of the application so received and select the persons to appear in a test for their enrollment.

(5) It shall carry out a test, if required, for enrollment of persons who have been selected on screening.

(6) It shall enroll the persons who qualify for enrollment separately for each centre.

(7) It shall train the persons so enrolled in accordance with the curriculum provided by the resource centre.

(8) It shall after completion of training conduct an examination of the enrolled persons in accordance with the procedure as laid down by the resource centre.

(9) It shall 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.

Responsibilities

(1) Board shall select a partner organisation to partner with resource centre for implementation of the Scheme.

(2) It shall function under the overall guidance and control of resource centre and follow the instructions issued to it by the Resource  centre from time to time about implementation of the Scheme.

(3) It shall be responsible to carry out the activities which it is required carry out under paragraph 4 of this Scheme.

(4) It shall maintain the profile of the Service Tax Return Preparer during their training and monitor their performance as Service Tax Return Preparers.

(5) It shall perform its functions to the satisfaction of resource centre.

(6) The Board may on the recommendation of the resource centre terminate the agreement with the partner organization and may

(a) enter into an agreement with any other partner organization ,or,

(b) assign its functions to the resource centre if in its opinion  the partner organization has failed to perform its function properly.

Function of Resource Centre

(1) The resource centre shall be responsible for day to administration of the Scheme.

(2) The functions of the resource centre shall include-

(i) to specify, with prior approval of the Board.

(a) the number of persons to be enrolled during a financial yea] training to act as STRPs

(b) the number of centers for training and their location where at training to be imparted during a financial year;

(c) 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 STRPs.

(iii) maintain the particulars relating to the STRP.

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

Preparation of Return by STRP

 Any assessee may at his option furnish his return after getting it prepared through a STRP  However an assessee shall not furnish a revised service tax return under rule 7B of the rules through a STRP unless he has furnished the original return through such or any STRP. The STRP shall prepare and furnish the return to the Superintendent of 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 acknowledgement of having furnished the return to the concerned eligible person.

Duties and Obligations of STRP

The Service Tax Return Preparer shall-

 (a) prepare the return with due diligence.

(b) affix his signature on the return prepared by him.

(c) furnish the return.

(d) hand over a copy of the return to the person whose return is prepared  and furnished by him.

(e) retain a copy of the acknowledgment of having furnished the return in respect of returns prepared and furnished by him, maintain record of the following-

(i) the name of assessees whose returns have been prepared furnished by him during that month

(ii) the Service Tax Code (STC) number and premises code of  assessees

(iii) period for which return is filed.

(iv) date of furnishing the return.

(v) authority with whom return is filed.

 (vi) amount of tax payable.

(vii) amount of tax paid.

(viii) fee charged and received by him.

Withdrawal of STRP Certificate

STRP's certificate can be withdrawn or cancelled by the resource centre on his being found guilty of misconduct or deficient  in services or in the  event of withdrawal of the scheme itself by the Board.

Service tax Returns

ST-3  return form has been amended by Notification 10/2009-ST dated 17.3.2009 to provided for capturing details of returns prepared and furnished by STRPs . S.No 8 has been inserted to include particulars of -

• Identification number of STRP

• Name of STRP

• Signature of STRP

Where to Contact

 Assessees may use the following contact details for any assistance under the scheme-

• www. trpscheme com.

• help line (toll free ) 1800-10-23738

• Directorate General of Service Tax, Mumbai, dgst @ sify.com or dgst @  rediffmail .com