TIOL-DDT 2054 · the untouched capture
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<p align="justify"><font face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 2054 </font><font size="3"></font><font size="2"><br>
</font></strong><font size="2"><strong>27.02.2013 <br>
Wednesday <strong><strong><strong><strong><strong><font color="#663399"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=17063"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2013.jpg" alt="DDT in Limca Book of Records" width="175" height="120" hspace="5" border="0" align="right"></a></font></strong></strong></strong></strong></strong></strong></font></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong> </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Revised
ST-3 Form will be available in ACES Soon - In case of delay, Last date
to file return will be Extended: CBEC </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>YESTERDAY</STRONG>, DDT informed about the new ST-3 form. The last date to file the return in the revised format for the period 1-7-2012 to 30-9-2012 is 25-3-2013. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Electronic version vs Print Version </strong>: CBEC clarifies that <em>the paper version had to be notified for legality. It must however be borne in mind that in terms of rule 7(3) of the Service Tax Rules 1994, all returns have to be filed electronically. The electronic version, to be completed by the assessee, may therefore differ in certain aspects from the paper version. For example, for certain fields, drop down menus from which an option has to be chosen, will be there in the electronic version but not in the paper version. Similarly, provisions in the electronic version to add rows or validate entries cannot be appropriately indicated in the paper version </em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>In case of delay </strong>: CBEC also clarifies that <em>the revised Form ST-3 is expected to be available on ACES by the first week of March. However in the event of any delay, the last date will be suitably extended and adequate time given so that no inconvenience is caused to the assessees. The assessees are advised to access the ACES website wherein updates will be given </em>. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">The previous return was to be filed for the period April to June 2012, but some assessees had filed their returns for the full half year period - that is - April to September 2012 and ACES had allowed this filing due to some snag. But this return for the full half-year period was later rejected and the assessees were asked to file revised returns for the quarter April-June 2012. And they all face adjudication proceedings for delayed filing of returns! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board further clarifies that <em>the objective behind revising the ST-3 form has been to retain the existing structure, which both the assessees and the departmental officers are familiar with, while making some changes required after 1-7-2012. Assessees are expected to fill in service wise data as before, for effective use of the data available consequent to the restoration of accounting codes. In the interregnum, the assessee might not be able to do so, as duty payment was not required to be service wise </em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While recognizing this difficulty, Board has requested the assessees to provide service wise data, to the extent possible, for this period also. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Don't wait till 25th March to file your return - Please do it as soon as ACES allows you - and do keep an eye on the ACES website on a daily basis - you don't know when they will be ready! </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=40&filename=notification/servicetax/2013/instruct1301.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Instruction in F. No. 137/98/2006-CX-4 ( Part-I), Dated: February 22, 2013 </strong></font></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>New ST-3 - No Glitches - Clarifies Senior Service Tax Officer </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>REACTING</strong> rather sharply to <strong>DDT </strong> comments yesterday, a senior Service Tax official wrote to us clarifying the issues raised by <strong>DDT</strong>. <strong>DDT </strong> comments are in red and the official's comments are in black. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">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 . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">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. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">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 . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">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. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">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 <strong>charged </strong> 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 " </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">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. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">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 ? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Item B1.6 - the accompanying instruction to this field clarifies this point. </font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">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 . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">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, <em>ipso facto </em>, make it the statutory power under which the service tax return is notified. Hence, it was not mentioned. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT </strong> is grateful. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether
Rs 18 Cr of Service Tax dues has really been paid - A question of verification
- Journey from CESTAT to HC </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</STRONG> case has seen many ups and downs since the day it entered the hallowed portals of the CESTAT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We reported the journey in the CESTAT on two occasions thus - </font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ST - CESTAT granting waiver of pre-deposit as appellant claimed that they had paid entire demand - on verification, it was found that only Rs.6 Crores had been paid - Order recalled and appellant directed to pay balance along with 25% penalty - Contempt initiated: CESTAT [<font size="1"> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2012/2012-TIOL-943-CESTAT-MUM.htm" target="_blank">2012-TIOL-943-CESTAT-MUM</a></font> - order dated 28/06/2012 ] </strong></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Note - In this case, the CESTAT had earlier granted an unconditional waiver of pre-deposit of Interest and Penalty subject to the verification of the submission made by the applicant that the entire amount of Service Tax of Rs.18,08,18,228/- had been paid. However, in the verification report submitted by the Revenue representative it was mentioned that out of the total demand of Rs.18,08,18,228/- the appellant had deposited only Rs.6,24,21,219/-. So, a recall was ordered of the earlier Stay order. Later, the appellant filed an application for modification and also tendered unconditional apology. The matter was heard and the Bench passed the following order - </font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ST - Contempt notice for misleading the Bench - Application for modification of Miscellaneous order - contentions raised by appellant are not acceptable as Stay was granted considering the statement of the Counsel while disposing Stay application - if the submissions are accepted then it will amount to review of order which is not permissible in the eyes of law - time extended for making pre-deposit - in view of unconditional apology tendered, SCN issued for initiation of contempt proceedings withdrawn: CESTAT [ <font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2012/2012-TIOL-1732-CESTAT-MUM.htm" target="_blank">2012-TIOL-1732-CESTAT-MUM </a></font>] </strong></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By this order dated 15/10/2012 the Bench dismissed the application for modification of the miscellaneous order dated 28/06/2012 and had directed the applicant to make a pre-deposit of the balance amount of service tax in dispute apart from that already made along with 25% of penalty within a further period of eight weeks and report compliance on 27/12/2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant had moved the Bombay High Court against this order by filing a Central Excise Appeal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appeal was admitted and the High Court has passed the following order - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#663399">"7. In the circumstances, we issue the following directions: </font></em></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(i) The Appellant shall, within a period of two weeks from today, produce before the Commissioner, Central Excise, Pune-I Commissionerate documentary evidence including tax challans in support of the case of the Appellant of having paid the entire dues on account of service tax amounting to Rs.18.08crores; </em></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(ii) The Commissioner, Central Excise, Pune-I Commissionerate shall thereafter on or before 20 February 2013, hear the Appellant and shall submit a report on or before 2 March 2013 to the Tribunal upon verifying as to whether the entire service tax dues have been paid as claimed and if not, the extent to which the dues of Rs.18.08crores remain outstanding; </em></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(iii) The proceedings shall thereupon be listed before the Tribunal for further orders on 11 March 2013. Upon verification, if it is found that the entire service tax dues of Rs.18.08crores have been paid by the Appellant, the Appellant shall then be entitled to a waiver of the pre-deposit of the penalty and interest; </em></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(iv) In the event that if it is found upon verification that the Appellant has failed to pay the entire service tax dues of Rs.18.08crores, the Appellant shall, in compliance with the order of the Tribunal dated 28 June 2012 within a period of four weeks of the date of determination by the Tribunal, pay the balance of the dues that are outstanding together with 25% of the penalty demanded as directed by the Tribunal."</em></font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In order to enable the Tribunal to pass a fresh order, the High Court set aside the CESTAT order dated 15 October 2012 passed on the application for modification and restored the application for consideration afresh in terms of the directions issued above. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appeal was accordingly disposed of. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See
<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2013/2013-TIOL-155-HC-MUM-ST.htm"><font size="1">2013-TIOL-155-HC-MUM-ST</font></a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Budget 2013 - Tomorrow - Stay With Us </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT </strong> is going to be a day of hope; it is going to be a day of despair. It is to be the best day for some and worst day for some. The FM has enough reasons to be proud and more reasons to be ashamed. The Budget unfolds tomorrow. Right from the morning, you will be subjected to palpitating experts analysing the economy on TV channels, from all angles - except the right one. All kinds of misinformation and ignorance will be paraded as pearls of wisdom. Intellectual constipation and expressional diarrhoea will be in glorious display. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In all this cacophony of sound and fury signifying nothing, the tricks our babudom plays on us through those not so very popular notifications, will be completely lost sight of. We, in TIOL will bring you the essence of the budget without its rhetoric. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As could be seen from our Budget Run Up, not many want any reduction in taxes - what worries <a></a> the taxpayers is the cumbersome procedure and harassment. If you can make tax payment simple and less complicated, many of us will be grateful. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">PC is certainly not in an enviable place! </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> - Thursday's cases</font></strong></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TOMORROW</strong>,
being Budget Day, we will not be carrying any cases in our Breaking News.
Do stay with us for the Budget. </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrowwith more DDT </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Day </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com </strong></a></font> </p>
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