REVISION OF SERVICE TAX RETURNS

[Dr. Sanjiv Agarwal]

Revision of Service Tax Return (Rule 7B)

There was no provision to file revised return in Service Tax law up to 28-2-2007.

Rule 7B had been inserted in Service Tax Rules, 1994 vide Notification No. 01/2007-ST dated 1.3.2007 w.e.f. 1.3.2007, which provides for revision of returns. Rule 7B allows an assessee to rectify mistakes or omission and file revised return within 60 days from the date of filing of the original return.

Rule 7B provides as follows -

“An assessee may submit a revised return, in Form ST-3, in triplicate, to correct a mistake or omission, within a period of sixty [ninety w.e.f. 1-3-2008] days from the date of submission of the return under rule 7.

Explanation.– Where an assessee submits a revised return, the relevant date for the purpose of recovery of service tax if any, under section 73 of the Act shall be the date of submission of such revised return.”

This rule is effective from 1st March, 2007. The return Form ST-3 should also indicate whether it is an original return or a revised return.

Time Period

W.e.f. 1.3.2008, Rule 7B of Service Tax Rules, 1994 had been amended vide Notification No. 4/2008-ST dated 1.3.2008 to provide file for filing of revised return to correct mistake or omission within a period of 90 days instead of 60 days as stipulated prior to 1.3.2008. Thus, w.e.f. 1.3.2008, revised returns can be filed within a period of 90 days from the date of submission of original return.

It may be noted that the period of 60 or 90 days shall be reckoned from the date of filing the return and not from the due date of filing the return. Also once a return has been filed before due date, it can be revised within 60 or 90 days as the case may be, on a date which may fall later than the last date of filing the returns. In such a case, there could be a question that whether prescribed late fee has to be remitted while furnishing the revised return. In absence of any provision to this effect, it is opined that late fees may not be applicable in case of revised returns.

It has also been provided that where an assessee submits a revised return, the relevant date for the purpose of recovery of service tax under section 73 shall be the date of submission of revised return and not the date of submission of original return.

In Ceolric Services v. CST, Bangalore 2011 (2) TMI 764 - CESTAT, BANGALORE, where service tax return was revised after a lapse of 11 months of filing original return and whereas Rule 7B of Service Tax Rules provides for 90 days time for such revision, it was held that considering the provisions of Rule 7C which provide for amount to be paid for delay in furnishing the revised return, revised return can not be ignored simply because same was filed after the period provided in Rule 7B.

In Zeus Infra Management (P.) Ltd v. CST, New Delhi [2014 (11) TMI 231 - CESTAT NEW DELHI] , where assessee had filed a revised return after expiry of time-limit specified in Rule 7B and department said that adjudication could not be made on the basis of belated return, it was held that law has to operate for proper application to determine tax liability on facts settled. If facts and circumstances establish that there was proper discharge of tax liability and Cenvat credit was available in accordance with law and also those aspects were evident from record, there would be no difficulty to pass appropriate adjudication order. The Tribunal refrained from deciding whether authority should act on belated revised return or on original return and remanded the matter back for fresh decision.