Service Tax on Works Contract - CAG Suggestions
RECENTLY, the CAG conducted a Performance Audit on assessees providing Works Contract Services, to seek an assurance that the indirect tax administration is adequately placed to safeguard the interests of revenue.
CAG has recommended:
1. Inter departmental co - ordination should be made obligatory mainly with Commercial Tax Department for identification of unregistered service providers and broadening of tax base in particular with VAT records through the Regional Economic Intelligence Committee meetings.
2. CBEC may consider to design a tool to co-relate service tax payments from the ST - 3 return filed either by service provider or service recipient involving service tax liability under reverse charge mechanism.
3. Monitoring mechanism to watch non/late filers should be strengthened keeping in view of determination of service tax payments through self assessment.
4. CBEC may review the requirement of submission of records and to ensure that the rule may be adhered to strictly or else the provision may be revised accordingly.