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Service Tax Rules, 1994

Rule 5 of the Service Tax Rules, 1994 relates to the records to be maintained by the assessee. The said rule provides that the assessee is not required to maintain any separate records for the purpose of service tax. The records maintained by the assessee under any law in force shall be accepted by the service tax authorities. The records can be maintained in manual or computerized format. The Records maintained by the assessee needs to be preserved for a period of at least five years following the financial year to which records pertain.

According to sub-rule (2) of Rule 5, every assessee is required to furnish to the superintendent of central excise a list of all records prepared or maintained by the assessee for accounting of his transactions. The same is reproduced for your ready reference:

“(2) Every assessee shall furnish to the Superintendent of Central Excise at the time of filing of return for the first time or the 31st day of January, 2008, whichever is later, a list in duplicate, of-

(i) All the records prepared or maintained by the assessee for accounting of transactions in regard to,

(a) Providing of any service,

(b) Receipt or procurement of input services and payment for such input services;

(c) Receipt, purchase, manufacture, storage, sale, or delivery, as the case may be, in regard of inputs and capital goods;

(d) Other activities, such as manufacture and sale of goods, if any.

(ii) All other financial records maintained by him in the normal course of business;

The requirement of the above provision is that every assessee is required to furnish the list of records in duplicate with the superintendent of central excise. The assessee has to submit the list only at the time of filing the return for the first time. As now e-filing of return is mandatory, it is advisable that after filing the return for the first time a list of records maintained by the assessee should be submitted with the department.    

As per Rule 5A every assessee on demand made by the officer authorised by the commissioner or the audit party deputed by the commissioner or the Comptroller and Auditor General of India is bound to produce the records.

CENVAT Credit Rules, 2004

As per sub-rule (2) of Rule 6 of the CENVAT Credit Rules, 2004, it is necessary for a service provider to maintain a separate account and records in respect of inputs or input services.  Further, as per sub-rule (7) of Rule 4  the CENVAT credit in relation to input service shall be allowed only after the invoice or challan(in case reverse charge) is received by the provider.

Thus these provisions show us the importance of records in service tax. The invoices are the basic document for claiming CENVAT credit. Although there is no requirement to maintain any separate records for the purpose of service tax but it is advisable to maintain records especially relating to invoices issued to the clients, invoices on the basis of which credit has been taken, payment received from the clients and service tax challan showing the amount of tax deposited. There is no format or form prescribed by the authorities. If there is any difference by any reason in Income tax records and service tax records reconciliation of the same should be made. It will be a useful tool at the time audit conducted by the department.

Master Circular on Procedural Issues – Circular No. 97/8/2007

a. Every taxable service provider is required to issue an invoice within a period 30 days from either the date of completion of service or date of receipt, whichever is earlier. Such Invoice should be serially numbered and should contain the name, address of the service provider and the service receiver, description and value of service provides and service tax payable thereon.

b. The amount of ‘education cess’ and ‘secondary and higher education cess’ should be shown separately and registration number of service provider should be mentioned on the invoice.

c. Provider of banking & other financial services can issue invoices within 45 days instead of 30 days. Further the invoices need not be serially numbered. They are also exempt from mentioning the address of service receiver.

d. In case of Goods Transport Agency (GTA), the invoice in addition to general information should also contain the consignment note number, date and gross weight of the consignment. As per Rule 4B of the Service Tax Rules, 1994, they are required to issue serially numbered consignment note containing the names of the consignor and consignee, vehicle registration number, details of goods, place of origin and destination & the person liable to pay service tax. Further, in case of less container load cargo or where the goods covered under a consignment note are to be shifted from one vehicle to another the record of registration number of vehicles carrying such goods should be recorded consignment note-wise as soon as the said information is available to them in their records and produce the same in case of verification.

e. In case of telecommunication Industry etc. it normally happens that they receive minor excess amount from the customers, if such excess is up to rupees one thousand then no invoice is required to be issued to the extent of excess amount received if the provider is exercising the option given by the Point of Taxation Rules, 2011.

The Point of Taxation Rules, 2011 provides the facility to such service providers to determine the point of taxation for the advance amount received (up to Rs. 1000), as date of payment or completion of service in case invoice is not issued within the period of 30 days.

Disclaimer: Although every precaution has been taken in writing the article. Author will not be responsible for any damage or loss in whatever manner consequent to any action taken on the basis of any content of this Article.


By: CA. Ankit Gupta


Published by

Ankit Gupta
(Tax Practitioner)
Category Service Tax   Report

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