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A 'PERSON LIABLE FOR PAYING SERVICE TAX' has to register with Superintendent of Central Excise under whose jurisdiction your premises fall. He should register within 30 days from date of commencement of the business of providing taxable service. The person will have to apply for registration in form ST-1. If a person is providing more than one taxable service, he may make a single application. He should mention in the application all the taxable services provided by him. [Rule 4(4)].
Applicant should submit following at the time of filing application for registration - (a) copy of PAN (b) proof of residence and (c) constitution of applicant. If application is signed by authorized person, power of attorney would be required.
Most important document that is required is copy of Income Tax PAN Number. Copy of memorandum of association or partnership deed and a list of partners/directors should be submitted.
The registration certificate will be granted by Superintendent of Central Excise in seven days in form ST-2. |
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Registration No., also known as ‘Service Tax Code (STC)’ is a fifteen digit PAN based number. First 10 digits of this number are the same as the PAN of such person. Next two digits are ‘ST’. Next three digits are serial numbers indicating the number of registrations taken by the service taxpayer against a common PAN.
(Para 2.6 of CBE&C Circular No. 97/8/2007-ST dated 23-8-2007.)
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The registration certificate gives details of ‘premises code’ which is given on the basis of Commissionerate + Division + Range + Serial No. The number is given in the registration certificate ST-2 at Sr. No. 5. This number is used for easy identification of location of registration of tax payer.
(Para 2.6 of CBE&C Circular No. 97/8/2007-ST dated 23-8-2007.) |
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Rule 4(5A) is inserted w.e.f. 1-3-2006 provides that if there is any change in information and details submitted in form ST-1 at the time of registration, the same should be informed to jurisdictional AC/DC within thirty days of such changes. The form ST-1 is both for new registration as well as amendment to existing registration certificate. |
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If the assessee ceases to carry on the activity for which he is registered, he should surrender the registration certificate to the Superintendent of Central Excise [Rule 4(7)].
Assessee should file up-to-date returns and apply for cancellation. Registration may not be cancelled if any demands are pending. |
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In some cases, a person liable for paying service tax on a taxable service - (i) provides such service from more than one premise or office (e.g. providing banking service or maintenance service from various branches/offices); or (ii) receives such service in more than one premise or office (e.g. GTA services, sponsorship services provided to body corporate or firm located in India, mutual fund agent’s service, insurance agent’s service etc. where he is liable under reverse charge method); or, (iii) is having more than one premise or office, which are engaged in relation to such service in any other manner, making such person liable for paying service tax (e.g. import of services where person receiving service is liable u/s 66A).
In such cases, such person can obtain Centralised Registration, at his option, if (a) he has centralised billing system or centralised accounting system in respect of such service, and (b) such centralised billing or centralised accounting systems are located in one or more premises.
He can register such premises or offices from where centralised billing or centralised accounting systems are located [Rule 4(2) as amended w.e.f. 2-11-2006].
More than one centralised registration of regional/zonal offices at various places is permissible as per MF(DR) circular No. B1/6/2005-TRU dated 27-7-2005 – confirmed in para 2.5 of CBE&C Circular No. 97/8/2007-ST dated 23-8-2007.
Centralised Registration will be granted by Commissioner in whose jurisdiction the premises or offices, from where centralised billing or accounting is done, are located [rule 4(3) as amended w.e.f. 2-11-2006]. |
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Assessee should prepare invoice in respect of his services. The Invoice should be prepared within 14 days from date of completion of taxable service or receipt of payment towards the value of taxable service, whichever is earlier. |
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As per rule 4A (1), the invoice/challan/Bill should be signed by authorized person of provider of input services, should be serially numbered and should contain following details - |
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Name, address and registration number of person providing taxable service |
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Name and address of person receiving taxable service |
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Description, classification and value of taxable service provided or to be provided and |
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Service tax payable on the taxable service
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The rule does not make mention of date, but actually, date should be mentioned. |
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Education cess and SAH education cess to be shown separately in the Invoice for complying with requirements of CENVAT Credit Rules to facilitate availment of CENVAT credit by recipient – Para 5.1 CBE&C Circular No. 97/8/2007-ST dated 23-8-2007. |
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In case of banking and financial services provided by banking company, FI, NBFC or a commercial concern, the invoice/challan need not be serially numbered and name and address of person receiving taxable service need not be contained on the invoice/challan [proviso to rule 4A(1) of Service Tax Rules]. This facility is also available to input service distributors of such type of service providers – Para 5.3 of CBE&C Circular No. 97/8/2007-ST dated 23-8-2007. |
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In some cases, service is provided continuously for successive periods of time and value of such taxable service is determined or payable periodically. In such cases, the Invoice or challan shall be issued within 14 days from last date of the period [second proviso to rule 4A (1) of Service Tax Rules amended w.e.f. 16-6-2005].
Services like telephones or Annual Maintenance Services are provided on continuous basis. Billing is done periodically (usually monthly). In such case, invoice should be made within 14 days from close that period. |
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In case of some services like services of commission agent, it is impractical to prepare invoice of commission for each sale. Billing is done at end of the agreed period (say month or quarter), which is termed as ‘Billing Period’. In such cases, it can be argued that such services are provided on continuous basis and Billing at end of the period should be acceptable. |
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Section 37D of Central Excise Act, which is also made applicable to service tax, requires rounding up of tax. However, this is only while making monthly/quarterly payment to Government. Rounding up of duty in each Invoice is not envisaged in section 37D of Central Excise Act. |
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After 13th May 2005, service tax will be payable as soon as advance is received, even if service is provided later. Thus, service tax is payable when advance is received. Invoice will have to be prepared. |
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The service tax is payable 5th of the month following the month (6th in case of e-payment) in which payments are received toward value of taxable services [rule 6(1) of Service Tax Rules]. Thus, service tax is not payable on basis of amounts charged in the bills/invoice, but only on amounts actually received during the relevant period. |
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Assessee should first utilise CENVAT credit available. Balance amount is payable in cash. |
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The tax is payable by a GAR-7 Challan in the bank where excise duty is accepted in that Commissionerate. The major account head is ‘044’. In addition, separate accounting code has been given to each service. See next chapter pages for account head for each type of service.
TR-6 challan (in yellow color in quadruplicate) is for payment in conventional mode while GAR-7 (one challan in yellow color with counterfoil) is used when Bank is having ‘EASIEST facility’. In both cases, payment is by cash or cheque.
The tax paid should be rounded off in rupees. Education cess and SAH education cess should be shown separately under separate account head in TR-6/GAR-7 challan. |
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Rule 6(2A) provides that cheque of proper amount should be deposited with bank on or before due date. It will be deemed to have been paid on due date, even if the cheque is realised later. However, if cheque is not realised, service tax will not be deemed to have been paid. |
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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. |
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‘EASIEST’ has been developed to make payment of tax easy. The facility is available with some 28 banks. The payment is made by GAR-7 challan. Assessee has to make one copy of challan and its counterfoil. |
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e-payment is a mode of payment in addition to the conventional methods of payment offered by the banks under specific security norms of Reserve Bank of India. This scheme facilitates anytime, anywhere payment and an instant cyber receipt is generated once the transaction is complete. It provides the convenience of making online payment of Central Excise and Service Tax through Bank's Internet banking service. About 28 Banks are authorized for this purpose.
Proviso to rule 6(2) of Service Tax Rules makes e-payment mandatory for payment of duty by all assessee who have paid Service tax of rupees 50 lakh or more in cash during the preceding financial year, w.e.f. 1-10-2006. |
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In case of delayed payment of service tax, there is mandatory payment of simple interest under section 75 for the period which the payment is delayed. The interest rate is 13% w.e.f. 10-9-2004; vide notification No. 26/2004-ST dated 10-9-2004 [Earlier interest @ 15% per annum from 11-5-2002. The interest rate was 24% up to 11-5-2002]. |
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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'. |
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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. |
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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 60 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. |
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There is no provision for submission of revised return after 60 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. |
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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 BE&C website. The facility is available to all service providers. |
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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 up to Rs 2,000. Late fee payable will be prescribed by Central Government by issuing a notification. The late fee payable is as follows – (a) Delay Up to 15 days – Rs 500 (b) Beyond 15 days and up to 30 days – Rs 1,000 (b) Delay beyond 30 days – Rs 1,000 plus Rs 100 per day of delay beyond 30 days, from 31st day maximum Rs 2,000- rule 7C inserted w.e.f. 12-5-2007. |
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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.
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