Servicing The Returns…
Post completion of his Doctoral degree, Phillip decided to become an entrepreneur and started an IAS Coaching centre that was registered as a private limited company. Over time, he had become one of the leading faculties in the country and his course materials were flying off bookshelves! One fine day, he received a notice from the Service Tax Department stating that he had not filed Service Tax returns for the past so many years and suitable action would be taken if he still failed to do the same. He was shell-shocked! On the advice of his friend, he had obtained a Service Tax Registration number and was regularly remitting the service tax amount to the department. So he was wondering as to how he was liable in any way? Then it dawned on him that the notice had specifically mentioned that he had not filed Service Tax returns….., but, he again had a doubt what are these Service Tax returns and why should they be filed ? With a truckload of questions that kept churning his mind he approached his friend, who went on to explain the entire process.
His friend explained to him that Service Tax returns are to be filed so as to let the department know the nature of the services for which the tax has been paid. Also, Service Tax returns need to be filed by all entities holding a valid Service Tax Registration Number, regardless of whether or not they have actually rendered any taxable service during the period in question. There are 2 major types of returns, namely:
- Form ST-3 – Form for the regular Service Tax Return
- Form ST-3A – Form for Provisional payment of Service Tax
Next, he explained that the Service Tax returns are to be filed on a half-yearly basis. i.e. for every 6 months, a Service Tax return needs to be filed. The due dates for filing the returns are as follows:
- April to September (H1) – 25th October
- October to March (H2) – 25th April of succeeding year
Phillip’s friend further stated that if Phillip does not file the Service returns for any half year within the due date, then he shall be liable for a penalty of
- Upto 15 days of default – Rs 500
- 15 – 30 days of default – Rs 1,000
- Greater than 30 days of default – Rs 1,000 + Rs 100 per day beyond 30 days (maximum Rs 20,000)
On hearing this Phillip’s face went pale. He asked his friend the mode through which the Service Tax returns are to-be filed. His friend replied that e-filing of Service Tax returns is now mandatory for all classes of entities.
Further, the govt. has released its own ST-3 Return preparation utility to facilitate the preparation of the Service Tax returns (the same can be downloaded for free from ACES). The file generated from the utility is uploaded onto the ACES website using a Login Id and Password (for which an account needs to be created on ACES). Even in case of more than one taxable service, a single service tax return is sufficient.
After patiently listening to all this, Phillip thanked his friend and started calculating the amount of penalty that he would be required to pay while also making arrangements to file the returns post-haste.