CBEC issues guidelines for detailed manual scrutiny of ST-3 Returns w.e.f. August 1, 2015
PrintListen to this Article
CBEC issues guidelines for detailed manual scrutiny of ST-3 Returns w.e.f. August 1, 2015
Background:
The Central Board of Excise and Customs (“CBEC” or “the Board”) vide Circular No. 113/07/2009-ST dated April 23, 2009 had laid down the procedure for carrying out detailed scrutiny of Service Tax Returns (“ST-3 Returns”) and had circulated a Return Scrutiny Manual for Service tax. However, with the introduction of Point of Taxation Rules, 2011 which shifted the liability of payment of Service tax from receipt basis to accrual basis and advent of Negative List based comprehensive taxation of services in July, 2012, the CBEC has unveiled the revised guidelines for detailed scrutiny of ST-3 Returns to be followed by the Revenue with effect from August 1, 2015 vide Circular No. 185/4/2015-ST dated June 30, 2015 (“the Circular”).
In terms of the Circular, the detailed scrutiny programme typically supplements the audit programme. The two processes of audit and scrutiny are, in fact, complementary to each other. The Board has further clarified vide the Circular that, "Even after the introduction of GST, it may be appreciated that the basic principles of scrutiny of returns and reconciliation of records would remain the same."
Gist of the guidelines for detailed manual scrutiny:
We are summarising herewith the gist of the guidelines issued vide the Circular for ease of understanding:
- Commencement of detailed manual scrutiny of ST-3 Returns from August 1, 2015 onwards;
- Preliminary scrutiny to be done by range officers;
- Main focus on small assessees whose total tax paid (Cash + Cenvat) during Financial Year 2014-15 is less than Rs. 50 Lakhs, though on the direction of Chief Commissioner, scrutiny of ST-3 Returns can be made for assessee whose monetary limit exceeds even Rs. 50 Lakhs;
- The purpose of detailed manual scrutiny of returns is to ensure the correctness of the assessment made by the assessee which includes checking the taxability of the service, the correctness of the value of taxable services, effective rate of tax after taking into account the admissibility of an exemption notification, abatement, or exports, if any etc.;
- In doing this, the proper officer must rely mainly on assessment-related documents like agreements/contracts and invoices. Detailed financial records should not be called for in a routine manner;
- Reconciliation of information furnished in the ST-3 return with ITR Form Nos. 4, 5, 6 and 26AS and any third party information made available;
- Scrutiny process of an assessee should be completed in a period not exceeding 3 months;
- In no event should an assessee be subjected to both audit and detailed manual scrutiny;
.http://www.servicetax.gov.in/…/st-circ…/st-circ-185-2015.pdf
Hope the information will assist you in your Professional endeavours. In case of any query/ information, please do not hesitate to write back to us.
Thanks & Best Regards.
Bimal Jain
FCA, FCS, LLB, B.Com (Hons)
Delhi:
Flat No. 34B, Ground Floor, Pocket - 1,
Mayur Vihar, Phase - I,
Delhi – 110091, India
Desktel: +91-11-22757595/ 42427056
Mobile: +91 9810604563
Email: bimaljain@hotmail.com
Category : Service Tax | Comments : 0 | Hits : 752
CENVAT CREDIT ON SET TOP BOX INTRODUCTION Service providers have at least a Telephone in their office. They are paying service tax on the telephone charges. The service tax on telephone charges becomes a part of the cost for the service provider. When he collects service tax from the customer it becomes tax on tax which increases the actual rate of tax payment. This phenomenon of tax on tax is called the cascading effect. The government does not want this to happen. The...
NO KRISHI KALYAN CESS ON DEBTORS AS ON 13th MAY’ 2016 (PART -2) Read more at: http://www.casansaar.com/article-submit.htmlThe enabling provisions for KRISHI KALYAN CESS (KKC) are contained in Chapter – VI of Finance Act’ 2016. As per the provisions, KKC shall be applicable at 0.5% on all taxable services and the proceeds of KKC would be exclusively used for financing initiatives relating to improvement of agriculture and welfare of farmers. The Cess will come into force with ...
As you are aware that the Finance Act, 2016 has increased the service tax rate to include a new cess, namely Krishi Kalyan Cess, which is applicable w.e.f. 01/06/2016. The effective rate of service tax for all new services provided after 01/06/2016 shall be as below: Service Tax ...
CENVAT CREDIT AVAILABLE VS CENVAT CREDIT TAKEN ALARMING AMENDMENT IN RULE 6(3) OF CENVAT CREDIT RULES (a) A manufacturer who manufactures two classes of goods namely:- Non exempted goods removed Exempted goods removed Or (b) a provider of output service who provides two classes of services, namely:- Non Exempted Services Exempted Services Shall follow any one of the following options applicable to him namely:- (i) pay an amount equal to 6% ...
Date : 19.03.2016 M/s. ABC LLP ( Service Provider ) M/s. XYZ Limited ( Service Recipient ) Ref: Service Tax on Works Contract and RCM Opinion Before giving opinion on the issues it will be useful to refer the questions related with this transaction. Assume ABC is LLP and XYZ Ltd is Body Corporate. ABC LLP is a sub contractor of XYZ Limited. XYZ Ltd sub contracted Works Contract work as well as Labor work also some time. Both partie...
Comments