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In view of implementation of ‘Negative list’ concept from July 1, 2012, Central Government has split the Service Tax Return filing cycle of six months (April-September, 2012) and modified the existing form for filing Service Tax Return i.e. Form ST-3 for the quarter April-June, 2012. Service Tax Return filing for the period July-September, 2012 has been deferred for sometime as Form ST-3 is not restructured to cope with the enormous changes made by Finance Act, 2012.

In this post, I would like to share some of the practical difficulties I faced while filing Service Tax Return. These are:

1) Return Period: While filing online return in Fill ST-3 option through ACES website, the assessee cannot change the time period for filing return. E.g. If the assessee has got registered with ACES in May 2012 and wants to file Service Tax Return for the first or second half year of the financial year 2011, he is not permitted to file the return for the said period.

But no such problem is faced while offline filing returns by downloading eFiling Utility.

2) Taxable amount charged: After the introduction of Point of Taxation Rules, 2011, detail of Gross amount for which bills/invoices/challans are issued (including export of service and exempted service) in Part 3F(II)-Taxable amount charged of ST-3 has become irrelevant.

3) Penalty period: If the assessee has not filed Service Tax Return for first and second half year for the Financial year 2011 and has paid penalty for late filing of these returns on 20th October 2012, it’s not apparent in which month/period, assessee should disclose the penalty amount in ‘Other Amounts Paid’ in Part 4(1)(d)(viii) and which month/period will be selected for providing  Source document details in Part 4B of Form ST-3?

4) Source document: Source document refers to a document against which assessee has paid arrears, penalty or interest during the period.

As per the Service Tax Return instructions, for arrears, interest and penalty, the source document/period is as follows—

(a) in case these are paid suo motu by the assessee, the period for which such amount is paid may be furnished

(b) if paid consequent to a show-cause notice (SCN) or order, the source document is relevant SCN No./Demand Notice No., Order in Original No. or Order in Appeal No. or any other order, etc.

Now the difficulty is, in case the assessee has suo motu paid interest/penalty, Source document period/number format is not specified in the instructions and also Service Tax Challan Number is not accepted in the offline eFiling utility as on validating the Challan- Service Sheet, one gets this message: Source document number is not in correct format for Row 1.

However, assessee can disclose source document period/number in two ways:

a) Service tax code_ Premises code_ST3_MMYYYY (Month year)

b) Or in case assessee doesn’t know against which source document he has made the payment, he can generate a copy of document number as:

Service tax code_ Tax Authority against payment is made (e.g. AC/CCE) _Year of Order received (in three digits) _Serial number of order received (in three digits) _OIO (Order in original).

5) No time period specified for availing option under Rule 6(3)(ii) of Cenvat Credit Rules:

As no time has been laid down in which option under Rule 6(3)(ii) can be availed, so assessee may face some difficulty while filing the return. Suppose if there are no exempt services provided during the period April-September 2011 and the same are provided for the first time in October 2011, so the question arises here is when should the assessee exercise option? in the period April-September 2011 or in October 2011 ?

It is advisable to exercise the option in the month in which credit on input services used in providing exempt services is availed. Suppose if in the above example, input services attributable to exempt services are provided in September 2011, then the assessee can exercise the option in September month and disclose the amount paid under Rule 6(3)(ii) in Part 5AA (c) or (d) in Form ST-3 for the period April-September 2011.

6) Cenvat credit utilized: Where the assessee has availed CENVAT credit on input services/inputs for providing both taxable and exempted services or taxable and exempted goods and has opted to make payment under Rule 6(3) of Cenvat Credit Rules, 2004 by debiting the CENVAT credit, there is no separate option for disclosure of the amount of Education Cess and Secondary Higher Education Cess paid in Part 5B(II)(c) of the form.

In this case, assessee has no other option but to disclose the total amount of Education Cess and Secondary Higher Education Cess paid under Rule 6(3) along with Service Tax in Part 5B(I)(vi) of the form. It is advisable here to intimate the Superintendent about the breakup in order to avoid any future hassles.

7) Other amounts paid: As per the Service tax return instructions, Any other amount paid under Part 4A(1)(d)(x) may include amount/pre-deposit amount ordered by Commissioner (Appeal) or Appellate Tribunal or Courts but there is no space available for providing the cause for amount deposited.

Also there is no option to provide Source document details against which the said payment is made in Any Other Amounts under Part 4B in ST-3 Form.

Priyanka Garg

Chartered Accountant

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