New ST-3 - No Glitches - Clarifies Senior Service Tax Officer
REACTING rather sharply to DDT comments yesterday, a senior Service Tax official wrote to us clarifying the issues raised by DDT. DDT comments are in red and the official's comments are in black.
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 A5- the period of the return has been mentioned as April to September and October to March because the periodicity of the return is six monthly. Ordinarily the return for the period April 2012 to September 2012 would have been filed in one go. Since the data had been filed earlier for the period April to June, assessees have to fill in data only for the period July to September. The fact that data is being filled for three months does not alter the fact that the return continues to be one of periodicity of six months. The letter accompanying the return may be referred to.
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 A 10.6- A9 asks for the taxable service for which tax is being paid/return is being filed. For a particular service, there will be a particular rate, depending on the case.
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 B1.2 - In the earlier return , field F(I)( c)(i) read as " amount received against export of service". This field , along with field (d) relating to abatement, had to be deducted in order to arrive at the net taxable value. With the introduction of the Point of Taxation Rules 2011, the word "received"is no longer relevant. The present B1.8 reads"Amount charged against export of service provided or to be provided". It again forms one of the fields which form part of the deductions claimed by the assessee.
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 ?
Item B1.6 - the accompanying instruction to this field clarifies this point.
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 .
As regards the non-mention of the CENVAT Credit Rules 2004, it may be noted that the CENVAT Credit Rules 2004 have been issued invoking the rule making powers of both the Central Excise Act and the Finance Act. Section 37(2) (xvia), (xviaa) (xxviii) of the Central Excise Act and section 94 (2)(eee) of the Finance Act are relevant in this context. However the rule making power in the Central Excise Act is to "carry into effect the purposes of this Act"It includes " impose on persons engaged in the production or manufacture------ and prescribe the nature of such information and the form of such records and returns-----", in section 37(2) (x). It does not extend to carrying into effect the purposes of Chapter V of the Finance Act 1994 (which is taken care of by section 94 of the Finance Act 1994) It also does not extend to prescribing the return for service tax, which is taken care of by section 94(2) (c). The fact that Rule 9(9) of the CENVAT Credit Rules 2004 refers to a half yearly return, in a form specified by a notification, to be submitted by a provider of output service who avails CENVAT credit, does not, ipso facto , make it the statutory power under which the service tax return is notified. Hence, it was not mentioned.
DDT is grateful.