Service Tax - Do Not Call the Assessee - CBEC
This is the time to file service tax half-yearly returns and many assessees after filing the self assessed returns by the due date assure themselves of having complied with the statutory requirement. The assesses, who file the return in the rush hour, may not find time to have ‘personalized touch' with the service tax officer or sometimes the assessees are so complacent that they send the return by the office boy and do not bother to meet the officers at the time of filing the return. However, this complacency on the part of the assessee gets a jolt by a phone call from the service tax officer informing the assessee that though the return is filed, it will be accepted subject to detailed scrutiny and also directing him to meet the officer to get the return scrutinized and accepted.
This is not a story concocted to malign the Department, but found to be a practice being resorted to by the ingenious officers in some Commissionerates to have “personalized touch” of the assesses who failed to meet them at the time of filing the return.
The CBEC is seized of the matter and has issued instructions directing the Commissioners to issue strict instructions to service tax field officers not to resort to such practices.
The Board letter states,
At the recent conference of the Chief Commissioners and Directors General, it was noted that there are reports that in many cases the service tax officers/formations are contacting taxpayers, soon after filing of the return (and without detecting any short/non-payment of tax or error) and conveying the message that though the return has been received, it would be accepted subject to detailed scrutiny. Such an action on the part of the officers is likely to give an impression to the taxpayer, that he is required to visit the service tax officer for getting his return scrutiny completed, even though there is no error in the return or short-payment of tax on part of the taxpayer.
So the Board wants:
1. Commissioners to issue strict instructions to the field officers not to resort to such practices.
2. Only in the event of detection of a short-levy, non-levy of service tax or arithmetical errors or errors in filing up the return form, the taxpayer should be contacted.
3. The assessee, if needed be contacted only by an officer not below the rank of a superintendent of Central Excise.
4. Record of such communication may be maintained by the officer.
5. Such record should be periodically reviewed by the senior officers.
Board has informed the Commissioners that any deviation from this practice would be viewed seriously.
Next time you get that friendly call from your Service Tax Officer to meet him in connection with your return, please ensure that he is at least a Superintendent and ask him if he is aware of the Board instructions.
DDT conducted a little survey on this. An assessee said that he invariably got the call if he did not meet the officer while filing his return. And he was not impressed with the ‘power to phone' being vested with the Superintendent – he said the calls always are from the Superintendent- Has the Board now officially authorized him?
There was a different view from the Department – an officer told DDT,
“But often the reason to contact the assessee is not merely the Superintendent or an Inspector, but the top order of the tax administrators. Very often they ask reports in such a manner as if the Superintendent has everything. They ask how many persons are registered under "Sale of Lottery Tickets". The service is classified under Business Auxiliary Service and nobody takes registration for "Sale of Lottery Tickets". BAS service consists of host of services and invariably all the assessees need to be contacted to get the sub-classification of the service. Similarly they ask what is the revenue from "providing safe vaults"? Safe vaults are taxable under Banking and other financial services and nobody pays service tax on safe vaults under a separate head.
Therefore to avoid contact with the assessee, it is the Board which needs to stop asking for the details which are not available in the ST 3 returns to achieve the desired objective of not contacting the assessees.”