Practical issues in e-filing of Service Tax Returns

1. Practical issues in e-filing of Service Tax Returns Workshop for Accountants 23rd February, 2012 CA Kejal V. Pandya Partner Kejal Pandya & Associates Chartered Accountants

2. Overview • Basics • Methods of Preparing Return • Steps prior to e-filing • Practical Issues CA Kejal V. Pandya

3. Basics • Applicability of filing Service Tax Return electronically: • Vide Rule 7 amended by Notification No. 43/2011-ST dated 25/08/2011 • With effect from 25th August, 2011 • Website • http://servicetaxefiling.nic.in CA Kejal V. Pandya

4. Methods of Prepraring Return • Prepare Return directly on website • Download Excel utility, prepare Return and upload XML • Use ready made software CA Kejal V. Pandya

5. Steps Prior to e-filing • File an application to the jurisdictional Asst./Deputy Commissioner of Service Tax, specifying – • 15-digit PAN based registration number (STP Code) • Valid e-mail address • Department will send User ID and Password to be used • to file ST Return • To avail other online facilities CA Kejal V. Pandya

6. Steps prior to e-filing… • Log on to the Service Tax e-filing home page • Upon entering the Service Tax code, user ID and password, you will be permitted to access the e-filing facility. • Follow the instructions given therein for filing the Returns • Obtain the acknowledgement. CA Kejal V. Pandya

7. Steps prior to e-filing… • Download latest excel utility before filing ST Return every time to cover the updates provided by the department in the utility • Read instructions before preparing Return CA Kejal V. Pandya

8. Practical Issues…General • No facility to segregate Service wise credit available (b/f and c/f) • No facility to attach any document to provide additional information/clarification from assessee’s side • After uploading the Return, the amount in the Return is shown as zero. • Contact department immediately and confirm the Return amount ASAP CA Kejal V. Pandya

9. Practical Issues…General • In excel utility, auto calculation not available resulting into manual calculation and entry for all fields • Filing of Return under "Goods Transport Operators Service" allowed though this service has been replaced by "Transport of Goods by Road (GTA) Service" • This may lead to errors - ACES system should be updated in this regards. CA Kejal V. Pandya

10. Practical Issues…General • Can a public holiday be considered as "grace day" for counting penal clause of non-filing of service tax Returns? That too in an 24*7 online era of Return filing? • No clarification from law in this regard. • Penalty of Rs.20,000 even in case of NIL Return • Penalty to be paid for all Returns filed after 01.04.2011 i.e. Returns of earlier years filed late? – law is silent CA Kejal V. Pandya

11. Practical Issues…online utility • “Save” option available only at the end of the online Return • Page number not available making it difficult to verify if anything is missed out • Direct access to any particular page not available, hence whole Return has to be scrolled for editing CA Kejal V. Pandya

12. Practical Issues…Online Utility • In case of centralized registration, Return is to be filed with consolidated data under the premises code of the address which is registered for centralized billing and accounting. • Option for all premises code is provided for selection instead of the main code… may result in error CA Kejal V. Pandya

13. Practical Issues…Multiple Challans • Entries of more than one challans paid in the single month • Excel utility CA Kejal V. Pandya

14. Practical Issues…Multiple Challans • Online Utility CA Kejal V. Pandya

15. Practical Issues…Trading Values • Is it required to add "Trading values" in column of total billing or total receipts received while filing ST-3 • No. The assessee shall avoid trading values or total excluded values of services while totaling the gross billing required to be shown in ST-3. CA Kejal V. Pandya

16. Practical Issues…Source Document • Incorporating Source Document in service tax return? • The source document is reference of document against which payment of service tax, interest or penalty is paid either in cash or in credit.  • The document could be audit report, order of any service tax authority or demand notice. CA Kejal V. Pandya

17. Practical Issues…Source Document • If assessee does not know against which document payment is made or lost/misplaced the document, assessee can generate a dummy number to feed the source document data field. CA Kejal V. Pandya

18. Practical Issues…Source Document • The source document number consists five variables as follows: • Service Tax Number • Authority against which payment is made (i.e. AC = Assistant Commissioner) • year of order or report • Serial number of order or report (in three digit) • Prefix OIO (i.e. Order in Original). CA Kejal V. Pandya

19. Practical Issues…Source Document • This number will help field officers in knowing exact outstanding left against a particular order or report. CA Kejal V. Pandya

20. Practical Issues…Source Document • Entry number 4B requires source document • If the returns are filed through Excel Utilities: • 4B. Source documents details for entries at column 4A(I)(a) (iii), 4A(I)(a) (iv), 4A(I)(b) (iii), 4A(I)(b) (iv), 4A(I)(c) (iii), 4A(I)(c) (iv), 4A(I)(d) (i) to (vii) (To be filled only if any entry is made against column 4A(I)(a) (iii), 4A(I)(a) (iv), 4A(I)(b) (iii), 4A(I)(b) (iv), 4A(I)(c) (iii), 4A(I)(c) (iv), 4A(I)(d) (i) to (vii) CA Kejal V. Pandya

21. Practical Issues…Source Document CA Kejal V. Pandya

22. Practical Issues…Source Document • If the returns are prepared directly online CA Kejal V. Pandya

23. Practical Issues…Mismatch Mismatch in Service Tax Payable and Paid while Filing Service Tax Return or Generating XML • Service Tax paid & payable figures are not matching • Education Cess paid & payable figures are not matching • Secondary Ed. Cess paid & payable figures are not matching CA Kejal V. Pandya

24. Practical Issues…Mismatch Reason for Mismatch error: • The online service tax returns (whether filed directly online or through Excel Utilities) does a reconciliation between service tax payable and service tax paid (either in cash or credit). • If there is any difference or mismatch it shows the above errors. CA Kejal V. Pandya

25. Practical Issues…Mismatch Course of action to remove these errors: These errors are avoidable and returns can be filed with these errors One must check the calculations of service tax payable and actually paid. If there is any major mismatch the same should be solved first and then move on to file the returns.

26. !!! Thank You !!! !!! Never Give Up !!! CA Kejal V. Pandya