Huge response to TIOL Seminar in Vizag
A large number of assessees participated in the one day work shop on Budget Changes organized in Visakhapatnam by the Tax Law Research Group in association with Taxindiaonline.com. The Chief Commissioner of Vizag Zone, Mr. Chandrahas Mathur was the Chief Guest on the occasion. The participants raised various issues which were answered by the Chief Commissioner and the Commissioners of the Zone. Some of the issues raised during the seminar are:
1. We issued invoice for value of taxable service at Rs 90,000/- and service tax @10.3% on this amount. The recipient paid only the basic value of Rs 90,000/- and the service tax amount has not yet been paid by him. Do we need to pay service tax?
Yes. You are required to pay service tax on Rs 90,000/- by treating it as cum-tax value.
2. Show Cause notice was issued to deny the CENVAT Credit on services like security, outdoor catering service and chartered accountant service. Whether these services are eligible for credit.
Since the Show Cause notice was issued, the issue will be taken up in adjudication after due process of law.
3. We are manufacturers of excisable goods and are claiming refund of service tax paid on certain services like CHA etc, used for export of excisable goods under Notification No 17/2009 ST 7.7.2009. The departmental officers are insisting on proof of payment of service tax by the providers of service. Is it required under law?
Prima facie, you are not required to produce the challans of payment of service tax by the service provider. You can meet the jurisdictional Commissioner for any problem in getting the refund.
During post lunch session, a panel of experts from the consulting fraternity answered some other issues raised by the participants. Some issues are:
1. We have lot of CENVAT credit under basic excise duty. Can this be used for payment of education cess and SHE Cess?
There is no bar under the CENVAT credit rules on utilising the credit on basic excise duty for payment of Education Cess and SHE Cess. Only restriction is that the credit of Education cess and SHE Cess cannot be used for payment of basic excise duty.
2. After clearance of goods from the factory, there is an amendment to the price. We paid the differential excise duty by raising supplementary invoices. Do we need to pay interest also on such differential duty?
Yes. The dispute is settled in favour of revenue in case of SKF India Ltd .
3. Can we file a revised ER 1 return if there is any error in the earlier return filed with the department?
Though the rules expressly do not provide for filing revised return in case of central excise, unlike in service tax, a revised return can be filed as following the maxim, whatever is not prohibited under law is allowed.
4. Some of the service providers from whom we are receiving services are not charging service tax on the ground of small scale exemption, etc. Is the recipient of the service is also responsible if there are any violations by the service providers?
The service receiver is not responsible for any violations by service provider, except in exceptional cases like abetting the evasion. However, as an abundant caution, you can obtain an undertaking from the service provider that they are under any exemption, small scale or any other.
5. We are paying advance to the service provider who is required to pay service tax on such advances received. Can we avail CENVAT Credit of service tax paid on such advances paid?
Since the service has not yet been received, you are not entitled for CENVAT Credit of service tax paid on such advances.
6. We are an SEZ unit and are claiming refund of service tax paid on services not wholly consumed within the SEZ. Do we need to file ST 3 returns?
No. In terms of the Notification No 17/2011 ST, the developer or the SEZ unit is required to only obtain service tax code by applying in Form A 3 to the jurisdictional Assistant / Deputy Commissioner.