Finally new ST 3 under Negative list Notified - With some glitches
THE wait is over. Finally, the Government has notified new ST-3 form to be filed for the period from July 2012 onwards. A proviso has been inserted in sub-rule (2) of Rule 7 of the Service Tax Rules, 1994 to specify the last date for filing the ST 3 return for the period between 1st July 2012 to 30th September 2012 as 25th March 2013.
The new ST 3 form has a long list of details to be furnished by service provider/ service receiver/ partial reverse charge/ etc and looks prima facie complicated. The practical difficulties will be known only when the assessees start filling up the details and file the returns.
As of now, the following issues need attention:
In item No A5, period of ST 3 return is mentioned as April to September and October to March - But the return to be filed before 25th March 2013 is only for the quarter from 1st July 2012 to 30th September 2012. We hope the proforma in ACES stipulates the period correctly.
Item No A 10.6 asks the return filer to mention the percentage of service tax payable under partial reverse charge as receiver of the service. This cannot be a single rate as many assessee may be paying service tax under partial reverse charge on different services like works contract, manpower supply, rent-a-cab, which have different percentage of reverse charge liability.
Item No B1.2 reads "Amount received in advance for services for which bills/invoices/challans or any other documents have not been issued" (obviously this includes advances received towards exports of services). But when it comes to deductions under B1.8, it is only "Amount charged against export of service provided or to be provided". It should have been "Amount charged / received in advance against export of service provided or to be provided"
Item B 1.6 reads "Amount on which service tax is payable under partial reverse charge" - It is not clear whether the full taxable value on the invoice has to be declared here or the value to the extent of partial reverse charge (say, 75% for supply of manpower service). If full invoice value has to be shown, can the remaining 25% value be shown as "abatement" under B 1.11?
The Notification reads "Return under section 70 of the Finance Act, 1994 read with rule 7 of Service Tax Rules, 1994", but ST 3 return is a combined return to be filed under Service Tax Rules, 1994 and CENVAT Credit Rules, 2004.
Notification No. , Dated: February 22, 2013