DDT’s questions answered
BSNL, MTNL no more offenders – In DDT on 20.4.2005, I had asked a question,
What is common to MTNL, BSNL IDEA CELLULAR, AIRTEL, HUTCH, RIM, TATA INDICOM?
And answered it as,
You will say they are all telephone companies but they provide different kind of services. The common factor is, they are all Service Tax offenders. From 1.4.2005, as per Rule 4A of the Service Tax Rules, “Every person providing taxable service shall, not later than fourteen days from the date of completion of such taxable service or receipt of any payment towards the value of such taxable service, whichever is earlier issue an invoice”. Aren’t these phone companies issuing monthly invoices?
Now the rule is amended so that they can issue the invoice after fourteen days of the billing period.
GTA – How to take Credit?
In the same DDT another issue was raised,
What is the document under which credit can be taken for Service Tax on goods transport paid by consignor or consignee?
Sadly, there is no document prescribed under Rule 9 (1) of the Cenvat Credit Rules. So if you are taking credit on such tax, you are an offender - because the Government has not notified the document for this purpose under Rule 9(1).
This lapse is now rectified and the document issued by the service receiver factory is included in the list of documents. But the solution does not really solve the problem. Now a Challan evidencing payment of Service Tax by the consignor/consignee is declared as a document for taking credit. Does this mean that credit can be taken only on a Challan and what is this Challan? Is it the TR 6 Challan? Does it mean that Service Tax has to be paid into the bank by TR 6 Challan only? Can’t it be paid by debit entry in the credit account? Another immediate clarification is required to avoid meaningless litigation.