Tuesday, October 6, 2015

Service Tax Records FAQ

Are there any statutory documents prescribed by the Government such as specified invoice proforma, specified registers etc. for use by the service providers?
There are no specific statutory records which have to be maintained by a Service Tax assessee. The records including computerized data, if any, which are being maintained by an assessee on his own or as required under any other law in force, such as Income Tax, Sales Tax etc. are acceptable for the purpose of Service Tax - (Rule 5(1) of the Service Tax Rules, 1994).

However, under the revised rule 5(2) of the STR, 1994 (with effect from 28th December, 2007), the assessee is required to provide to the jurisdictional Superintendent of Central Excise/Service Tax a list, in duplicate, of all the records prepared or maintained by the assessee for accounting of transactions in regard to (a) providing of any service, whether taxable or exempted; (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 and all other financial records maintained by him in the normal course of business,

Where from the Service Tax assessee can get the Forms such as ST-1, ST-3 etc?

The Forms are available on the CBEC website and also at the Central Excise Range/Division/Commissionerate Hqrs. offices. The forms are also available in the market and are sold by private publishers.

Can the Department ask for more information than what assessee is submitting to it in the Form ST-1 and ST-3?

Yes. If it is felt necessary, the Department can call for additional information/ documents for scrutiny, as per Rule 6(6) of the Service Tax Rules, 1994 and Sec. 14 of the Central Excise Act, 1944 which is made applicable to Service Tax matters, as per Sec. 83 of the Finance Act, 1994.

Rule 5A of Service Tax Rules, 1994 provides that every assessee, on demand, is required to make available to the Central Excise/Service Tax officer authorized by the Commissioner or the audit party deputed by the Commissioner or the Comptroller and Auditor General of India, within a reasonable time not exceeding fifteen working days from the day when such demand is made, or within such further period as may be allowed by such officer or the audit party, the following records/documents for the scrutiny of the officer or audit party:

i. The records as mentioned in Rule 5(2) of STR, 1994;
ii. Trial balance or its equivalent; and
iii. The income-tax audit report, if any, under section 44AB of the Income- tax Act, 1961 (43 of 1961).

In the event of failure to make available the records/documents, a penalty of Rs. 10000 or Rs.200 for every day during which such failure continues, whichever is higher, starting with the first day after the due date, till the date of actual compliance, is imposable on the assessee under amended section 77 of the Finance Act, 1994.

As provided under Rule 5A of STR, 1994, an officer authorized by the

purpose of carrying out any scrutiny, verification and checks as may be necessary to safeguard the interest of revenue.

Whether issue of Invoice/Bill/Challan is mandatory? When should the same be issued?

Issue of Invoice/Bill/Challan by a Service Tax assessee is mandatory as per Rule 4A of the STR, 1994. The same should be issued within 14 days from the date of completion of taxable service or receipt of payment towards the service, whichever is earlier. However, if the service is provided continuously for successive periods of time and the value of such taxable service is determined or payable periodically, the Invoice/Bill/Challan shall be issued within 14 days days of the date when each such event specified in the contract, which requires the service receiver to make any payment to service provider, is completed. ( Rule 4A (1) of the STR 1994).

Is there any prescribed format for the Invoice/Bill?

There is no prescribed format for issue of Invoice. However, the invoice/bill/challan should contain the following information (Rule 4A of the STR, 1994):

i. Serial number.
ii. Name, address and registration no. of the service provider.
iii.Name and address of the service receiver.
iv. Description, classification and value of taxable service being provided or to be provided.
v. The amount of Service Tax payable (Service Tax and Education cess should be shown separately)

Note: If the service provider is a Banking company, the details at Sl. No (i) and (iii) are not necessary.

In respect of the taxable services relating to the transport of goods by road, provided by the Goods Transport Agency, the service provider should issue a consignment note containing the following information (Rule 4B of the STR, 1994): -

i.  Serial Number
ii. Name of the consignor and consignee
iii.Registration no. of the vehicle
iv. Details of the goods transported
v.  Details of the place of origin & destination
vi. Person liable for payment of Service Tax (consignor /consignee / GTA)

Is the amount of Service Tax charged from the client compulsorily to be indicated separately in the Bills / Invoices / Challans raised on him?

Yes. It is mandatory to separately indicate the amount of Service Tax charged in the Bills/Invoices/Challans raised on the clients, as per Section 12A of the Central Excise Act, 1944 which is made applicable to Service Tax, under Sec.83 of the Finance Act, 1994. Such mention of the Service Tax amount in the Invoice / Bill / Challans, would also facilitate the service receiver to avail the CENVAT credit of the Service Tax paid on the input services.

What is the preservation period for service tax records and documents?

All records and documents concerning any taxable service, CENVAT transactions etc. must be preserved for a minimum period of 5 years immediately after the financial year to which such records pertain (Rule 5(3) of Service Tax Rules 1994.)


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