Service Tax - Accounting Codes Back in Service Tax
BY Circular No. 161/12/2012 dated 6th July, 2012, CBEC had announced a single accounting code 00441089 for all services with effect from 1st July 2012. (Please see - 09.07.2012).
Board had received suggestions from the field formations that the service specific old accounting codes should be restored, for the purpose of statistical analysis.
So, Board has announced a list of 120 descriptions of services for the purpose of registration and accounting codes corresponding to each description of service for payment of tax.
Board clarifies that:
1. Descriptions of taxable services given in the annexure are solely for the purpose of statistical analysis.
2. On the advice of the office of the C & AG, a specific sub-head has been created for payment of "penalty" under various descriptions of services.
3. Henceforth, the sub-head "other receipts" is meant only for payment of interest payable on delayed payment of service tax.
4. Accounting Codes under the sub-head "deduct refunds" is not to be used by the taxpayers, as it is meant for use by the field formations while allowing refund of tax.
5. Registrations obtained under the positive list approach continue to be valid.
6. New taxpayers can obtain registrations by selecting the relevant description/s from among the list of 120 descriptions of services given in the Annexure.
7. Where registrations have been obtained under the description 'All Taxable Services', the taxpayer should file amendment application online in ACES and opt for relevant description/s from the list of 120 descriptions of services given in the Annexure.
8. If any applications for amendment of ST-1 are pending with field formations, seeking the description 'all taxable services', such amendment may not be necessary and the officers in the field formations may provide necessary guidance to the taxpayers in this regard.
9. Directorate General of Systems will be making necessary arrangements for display of the list of 120 descriptions of services and their corresponding Accounting Codes in Form ST-1 and Form ST-2 as may be necessary.
Board instructs officers in the field formations to extend necessary guidance to the tax payers regarding the selection of appropriate description of taxable service and facilitate the payment of service tax/cess due under the appropriate accounting code.
In our CobWeb 307 - August 30 2012, we had remarked,
One of the Chief Commissioners rued the loss of service tax code after the introduction of Negative List of Services. The rationale was - the CBEC was, under the old regime (The Positive List), collecting service tax deposited under specific head like telecom, banking, share-broking etc, and such primary data was a good help for the monitoring authorities. Now that, a common code has been provided as none knows what all services are taxable today (for instance, TIOL recently received a query - whether tailoring is liable to service tax?), all taxpayers are required to deposit tax under single code. But the fact remains that a valuable monitoring tool, which could have been saved from falling in disuse, is lost. Earlier, the tax collection under one head used to indicate the trend of growth or slowdown in that specific sector, and any mismatch was a good indicator of flourishing tax evasion in that sector.
With the point being impressively made, the Finance Minister could not resist raising the query - Who did it? Whose idea was this? Silence was obviously the prompt answer. Even before one could let the cat out of the bag, he had made up his mind and called for a fresh look at this issue. And, if the proposal to be put up coming Monday makes sense to him, without causing any chagrin to the taxpayers, one may expect some changes in the service tax return form. Incidentally, a good number of banks are perhaps not aware of the introduction of the Negative List and the notification of the common code, and that is why they have not done away with the service code for depositing tax. If the FM decides to retain the old service codes for earlier notified services, and a common code for new services joining the tax net, which can be allotted fresh code after a year - and after a review based on the quantum of tax mobilisation, the banks can save themselves from making changes at their end. But, a word of caution is necessary for FM here - TIOL has come to know that a few assessees, who deposited their service tax under a different head, were recently issued Show Cause Notice for not paying tax under correct head and have been asked to pay the same again with interest and penalty! The FM will have to put a full stop to this sort of SCN-manufacturing by the insensitive officers in the Department if he intends to see a revival of the business in the economy .
We were told that the old accounting codes would be restored in the first week of September, but it took more than two months -quite normal for Government functioning.
CBEC Circular No.165/16/2012 -ST, Dated: November 20, 2012