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Service tax return mandate?

09 July 2012

If there is no transaction during the year,Is the person (who is registered) liable to file service tax return??? pls support tyhe answer with section, rule or notification or circular as applicable...

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11 Replies

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 09 July 2012

Yes for a registered assessee filing of return is mandatory. Even when there is no transaction, a NIL return has to be filed. It is quite a basic question you can go through the FAQ to get the reference.

vanisha mittal (CA) (88 Points)
Replied 09 July 2012

Mr. Ajit, have checked the FAQs of 2011, but then again its just clerification by the dept which is binding on thedeptt not on the assessee. This complusion isno where in the section or Rule, so assessee is not binding by this... the opinion which i framed

CA.Varalakshmi.M (Manager-Finance) (482 Points)
Replied 09 July 2012

A ‘registered’ service provider is referred to as an ‘assessee’(Refer section 69 of Finance Act, 1994)

As per Rule 7 of service tax rules Every assessee shall submit a half yearly return in From ‘ST-3’ or ‘ST-3A’, as the case may be, along with a copy of the Form TR-6, in triplicate for the months covered in the half-yearly return.

So every registered assessee is required to file Service tax return.

vanisha mittal (CA) (88 Points)
Replied 09 July 2012

Again the ques is, Assessee refers to a person "who is liable to pay service tax". if u have no transaction then how u will be liable for service tax?

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 09 July 2012

Yes I agree with M.Varalakshmi. It is quite a basic query.

MAHESH GARG (AUDIT EXECUTIVE) (334 Points)
Replied 09 July 2012

Dear CA Vanisha Mittal,

Please note that:

1) Clarification by the department if contradicts law then it is not binding on the assesee else it is.

2) Non filing of ST return is most likely to lead to "Best Judgement assessment" as per sec.72 of Finance Act, 1994

Please remember Filing of service tax return is not dependent upon payment of ST.

Both are independent issues.

CA sawan kumar (senior associate) (154 Points)
Replied 09 July 2012

Service Tax return is to be filed by every person liable to pay service tax even if he has not actually provided any service during a particular and no service tax is, therefore payable by him. Therefore, even if no service has been provided during the half year and no service tax is payable, the assessee has to fila a Nil return within the prescribed time limit.

vanisha mittal (CA) (88 Points)
Replied 09 July 2012

I understand that all the above views are based on the clarifications issued in the past. However, the relevant provisions for filing of the return refers to a person liable for payment of service tax (Section 70 of the Finance Act and Rule 7 of the Service Tax Rules).

Further, I understand that clarifications are not binding in nature.

Can anybody provide clear picture on the basis of legal provisions.

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 09 July 2012

Your issue is correct, but in light of the interpretation of a law thrust is always given to an existing practice when the new law is silent in that respect. As per the normal understanding of law, you should not interpret it in any manner which is prejudicial to the law itself. All compliance for a registered dealer is same irrespective whether there is a liability to pay or not.