Service Tax Returns

Every assessee has to submit half yearly return in form ST-3 in triplicate within 25 days of the end of the
half-year. ‘Half year’ means 1st April to 30th September and 1st October to 31st March of financial year. The
return should be accompanied by TR-6/GAR-7 challans, evidencing payment of duty. Details in respect of each
service are to be provided separately. However, service tax payment details and Cenvat credit details are
common and combined. There is no column to show excess amount paid, if any. Presumably, this will have to be
intimated by a separate letter and/or given in the ST-3 form as a ‘remark’ or ‘note’.

Last date for filing return is a bank holiday – If last day of payment and filing return is a public holiday, tax
can be paid and return can be submitted on next working day – CBE&C circular No. 63/12/2003-ST dated 14-10-
2003.

Revised return – Rule 7B of Service Tax Rules has been inserted w.e.f. 1-3-2007 to allow an assessee to rectify
mistakes and file revised return within 90 days from the date of filing of the original return. Rule 9(11) of Cenvat
Credit Rules (inserted w.e.f. 1-3-2007) allows an assessee to rectify mistakes and file revised return within 60
days from the date of filing of original return. This provision applies only to service providers and not to
manufacturers.

What is to be done if mistake comes to notice after 90 days? – There is no provision for submission of revised
return after 90 days. In such cases, if assessee finds that he has made some mistake, he should pay the amount
by TR-6/GAR-7 challan and inform department suitably. If he has paid excess amount by mistake, he is required
to file refund claim. He cannot adjust excess payment on his own, except in cases where it has been specifically
permitted. If he has not taken Cenvat credit of certain inputs, input services or capital goods, he can avail it in
subsequent period, since there is no time limit for availing Cenvat credit. This will be reflected in his return for
that subsequent period, as in normal course.

Electronic filing of return – Department has introduced e-filing of service tax return on experimental basis
from April, 2003. It is optional. The procedure has been described in CBE&C circular No. 52/1/2003-ST dated 11-
3-2003. Guidelines are also issued in question answer form on CBE&C website. The facility is available to all
service providers.

Late fee and penalty for filing late return – Section 70(1), as amended by Finance Act, 2007 w.e.f. 11-5-2007,
makes provision for late filing of return with late fee which can be upto ` 20,000. Late fee payable will be
prescribed by Central Government by issuing a notification. The late fee payable is as follows – (a) Delay Upto
15 days – ` 500 (b) Beyond 15 days and upto 30 days – ` 1,000 (b) Delay beyond 30 days – ` 1,000 plus ` 100 per
day of delay beyond 30 days, from 31st day maximum ` 2,000- rule 7C inserted w.e.f. 12-5-2007

Penalty can be waived if no tax was payable – Once a person is registered, he has to file return even if there
is no tax liability. He should file Nil return if there was no service tax payable. However, if he does not file return,
penalty can be waived/reduced if non-filing of return was for sufficient cause [Rule 7C]

Department is required to accept late return even if late fee is not paid – In case of returns filed late, the
appropriate late fees should be paid at the time of filing the return, without waiting for any communication or
notice from the department. Mere non-submission of evidence of payment of late fee along with the return is,
however, not a ground for refusal to allow filing of the return – para 6.4 of CBE&C Circular No. 97/8/2007-ST
dated 23-8-2007.

Provisional assessment

Assessee can make request in writing for provisional assessment to Assistant/Deputy Commissioner.Provisions
of Central Excise Rules in respect of provisional assessment are applicable, but there is no requirement of any
bond [rule 6(4)].Of course, reason has to be stated why he is not able to correctly determine his tax liability.
After such request is made, assessee has to submit memorandum in form ST-3A showing difference between
service tax collected and deposited. Application for provisional assessment should be made to Assistant/
Deputy Commissioner. Provisional assessment can be finalized by Assistant/Deputy Commissioner after
calling further documents as may be necessary. -Rule 6(4), 6(5) and 6(6) of Service Tax Rules, 1994.

Self Assessment

Like Income tax and central excise, service tax assessment is basically self-assessment. There is no provision
for compulsory assessment of assessee’s return. Show cause cum demand notice can be issued within one
year. Notice beyond one year can be issued only if there is fraud, suppression of facts, wilful misstatement or
collusion.
Every person liable to pay tax shall himself assess the tax due on the services provided by him. A return in
prescibed form will be submitted to Superintendent of Central Excise [section 70(1)]. The ST-3 return filed by
assessee contains a ‘Self-Assessment Memorandum’.
Provision relating to self adjustment of payment of tax has also been changed in view of the change in the
payment of tax from “Cash basis” to “Accrual basis”.

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