Update on Indirect Tax - Service Tax and Excise for the month of Dec 2014

A. Service Tax

1. Service Tax payment for the month of November, 2014 is due for payment on 6th December, 2014 for assesses excluding Individual, Proprietary Firm, Partnership Firm or LLP. It is now mandatory for all assesses w.e.f. October 1, 2014, to pay their dues through internet banking (e-payment) (In case the assessee wants to use any mode other than internet banking, a specific permission may be taken from the Assistant Commissioner/ Deputy Commissioner).

2. ST 3 Return – Half Yearly Service Tax Return (ST-3) for the period April – September 2014 was due on October 25th, 2014. The Excel Utility can be downloaded from www.aces.gov.in/ downloads. The Government had extended the date for filing of returns till November 14, 2014 (Order No.2/2014-ST, Dated 24-10-2014). In case return has not been filed till date, it is advisable to file the same as early as possible, with applicable late fee.

3. Payment under VCES – Assesses who had opted for the recently concluded VCES would have paid the 2nd and final instalment by 30-6-14 (without interest). In case the same has not been paid in full, the balance can be paid till 31-12-14 (with interest).

4. VCES 3 – Assessees who had availed the VCES scheme and have done their payments in full, need to apply to the Department for VCES 3 (Discharge Certificate) giving copy of VCES 2 and all Challans. The Department has started issuing VCES 3 for assessees who have applied.

5. The old service specific codes have been restored thus assesses are required to classify the services rendered by them as per the new notification and pay accordingly in the respective accounting codes. 

6. Please note that in case you are liable to pay Service Tax (in case of services under reverse charge), you are not allowed to set it off against available balance of CENVAT credit. You need to pay the same. You can however avail CENVAT credit of this payment as in normal cases.

7. Amendment in the registration certificate is mandatory to reflect the complete set of services provided/ availed under reverse charge as per the new accounting codes.

8. CENVAT can now be availed only for the last 6 months in the normal case, other than cases of re-credit, as clarified by the Government. Thus you are advised to avail and utilise CENVAT and not keep it accumulated beyond 6 months, as that would become ineligible.

B. Central Excise

1. Excise payment for the month of November, 2014 is due for payment on 6th December, 2014 for assesses excluding SSIs. It is now mandatory for all assesses w.e.f. October 1, 2014, to pay their dues through internet banking (e-payment) (In case the assessee wants to use any mode other than internet banking, a specific permission may be taken from the Assistant Commissioner/ Deputy Commissioner).

2. Excise Returns – Last date for filing of ER 1, ER 2 and ER 6 is 10th December, 2014.

3. CENVAT can now be availed only for the last 6 months in the normal case, other than cases of re-credit, as clarified by the Government. Thus you are advised to avail and utilise CENVAT and not keep it accumulated beyond 6 months, as that would become ineligible.

C. Major Amendments in Nov 2014

Service Tax

1. Constitution of Review Committee of Chief Commissioners of Central Excise & Chief Commissioners of Service Tax – Review committee for making an appeal to the Appellate Tribunals have been reconstituted (Office Order 10, Dated 12-11-2014)

2. Conditions for allowing Cenvat Credit - Clarification on availment of Cenvat Credit after Six Months as per Rule 4 of the Cenvat Credit Rules, 2004 – The Department has clarified in certain cases wherein original credit has been taken within 6 months and if the same is reversed as per provisions and a recredit is taken after 6 months of the original date, the same shall be allowed. (Circular No.990/14/2014-CX-8, Dated 19-11-2014)

Central Excise

1. Special Audit in Certain Cases - Clarification on Splitting up of Rebate Claims to avoid Pre-Auditing – It has been found that some assesses are splitting their claim for rebate to keep the same below 5 lakhs so as to avoid pre-audit. Instructions have been issued to the officers that they may use their discretionary powers to club such claims and order pre-audit of the same (Instruction [F.NO.206/05/2014-CX.6], Dated 3-11-2014)

2. Constitution of Review Committee of Chief Commissioners of Central Excise & Chief Commissioners of Service Tax – Review committee for making an appeal to the Appellate Tribunals have been reconstituted (Office Order 10, Dated 12-11-2014)

3. Conditions for allowing Cenvat Credit - Clarification on availment of Cenvat Credit after Six Months as per Rule 4 of the Cenvat Credit Rules, 2004 – The Department has clarified in certain cases wherein original credit has been taken within 6 months and if the same is reversed as per provisions and a recredit is taken after 6 months of the original date, the same shall be allowed. (Circular No.990/14/2014-CX-8, Dated 19-11-2014)

4. Procedure of service tax refund/exemption to SEZ – It has been clarified that units in SEZ and the Developer can now route their excise related forms and refunds through a specified officer in the SEZ. (F.No.B1/6/2013-TRU)

 This is for your kind information.

Best Regards

CA. Tarun Kr. Gupta

FCA, FCS, PGDBM, B.Com (Hons.)

Member of Indirect Taxes Committee of Institute of Chartered Accountants of India - EIRC - 2014-15

Member of Indirect Taxes Committee of Bengal Chamber of Commerce & Industry - 2014-15 and 2013-14
Special Invitee - 2014-15 - Executive Committee - Association of Corporate Advisers & Executives
Co-Chairman, 2014-15, Indirect Taxes Sub Committee - Association of Corporate Advisers & Executives