Frequency of Service Tax Return / Payment – Monthly, Quarterly, Half yearly ?

Dear All,

After budget 2012, there is lot of confusion as to frequency of filing of  Service Tax Return. Budget 2012 Presented by Finance Minister on 17.03.2012  proposed that the cycles for the payment service tax and filing of return should coincide.  In View of the same Following Changes are proposed in Rules Related to periodicity of Service tax Return Filing and Service tax payment.

Filing of Return of Service Tax

It is provided that an assessee whose service tax liability was Rs. 25 lakhs or more in the previous year and in case of a newly registered service provider other than individual or firms, will have to file return “Monthly”.

And in other cases i.e. Individuals and partnership firm or proprietary firms having paid service tax of less than Rs. 25 lakhs in previous year, will have to file return ‘Quarterly’.

Payment of Service Tax

Rules relating to payment of service tax has been rationalised. At present only Individuals or Firms are allowed to pay the taxes on quarterly basis. Now this relaxation has been given to every small assessee. The same can be understood with the following table:-

In an another important change, now every Individual or firm (including LLP) can pay service tax on receipt basis provided their turnover in previous year (FY 2011-12 for 2012-13) towards taxable service was upto Rs. 50.00 lacs. 

Common Service Tax & Excise Return Form

It had also been proposed to harmonize the ER-1, ER-3 and ST-3 returns so that a single common return can be prescribed instead of these three returns as measure of simplification of the Business Processes in respect of filing the Return by assesses. Now return to be filed in proposed new ESTReturn form.

Common Service Tax & Excise Registration  Form

It is proposed to prescribe a common application format for seeking  registration under Central Excise as well as Service Tax.

Current Status of Return Frequency, Payment Due Dates, Registration & Return Forms

1. Return Frequency – In nutshell, these amendments are just proposed and till now not enacted  by amending Service Tax Rules, 1994 and Central Excise Rules, 2002. Thus it is clear that provision as to filing of service tax returns are not amended and still service tax returns to be filed half yearly.

Payment will also be governed by old provisions till new proposed provisions get enacted which are as follows :-

1. In case of Individuals or Proprietary Concerns and Partnership Firm, service tax is to be paid on a quarterly basis. The due date for payment of service tax is the 5^th of the month immediately  following the respective quarter ( in case of e-payment, by 6^th of the month immediately following the respective quarter). For this purpose, quarters are: April to June, July to September, October to December and January to March. However, payment for the last quarter i.e. January to March is required to be made by 31^st of March itself.

2     In case of any other category of service provider other than specified at 6.1 above,  service tax is to be paid on a monthly basis, by the 5th of the following month ( in case of e-payment, by 6^th of the month immediately following the respective month). However,  payment for the month of March is required to be made by 31st of March itself.      

Service Tax Registration & Return Forms – Old ST-1, ST-2 & ST-3 will continue till new forms get notified by government which has not been notified till date.

Tax Advisor,

Deepak Tanwar

CA-Inter