Filing of Service Tax Returns

[Ganeshan Kalyani]

Every person liable to pay service tax has to submit half yearly return in form ST-3 within 25 days of the end of the half-year, as per rule 7 of Service Tax Rules, 1994, read with section 70(1) of Finance Act, 1994. Similarly, Input Service Distributor (ISD) is also required to file half yearly return, even if he is not liable to pay service tax.

Automation of Central Excise and Service Tax (ACES): - In continuation of its efforts for trade facilitation, Central Board of Excise and Customs (CBEC) had rolled-out a new centralized, web-based and workflow-based software application called Automation of Central Excise and Service Tax (ACES) in the year 2009. ACES has automated the major processes of Central Excise and Service Tax - registration, returns, accounting, refunds, dispute resolution, audit, provisional assessment, exports, claims, intimations and permissions. The ACES application has interface for Central Excise Assessees, Service Tax Assessees, Central Excise Departmental Officers and Service Tax Departmental Officers.

Registration in ACES: - To transact business online under ACES, all users have to first register with ACES. To register under ACES, the assessee needs to log onto the system, through internet at http://www.aces.gov.in. Registration in ACES is a onetime affair.

Steps for preparing and filing returns: - E-filing of return is mandatory w.e.f. 1^st October, 2011 in respect of all assessees as per Rule 7(3) of Service Tax Rules, 1994. The assesses can electronically file statutory returns of Central Excise and Service Tax either online or through off-line return utilities which can be filled-in-off-line and uploaded to the system through the internet. Few steps for filing of returns are mentioned below:

1. Returns can be prepared and filed online by selecting the ‘’File Return’’ option under RET module after logging into the ACES.
2. Returns can also be prepared and filed off-line. The Assessee needs to download the Offline return preparation utility available at http://www.aces.gov.in (Under Download) and prepare the return offline using this utility.
3. Selects RET from the main menu and uploads the return.
4. Returns uploaded through this procedure are validated by the ACES before acceptance into the system which may take up to one business day.
5. The status will appear as “uploaded” meaning under process by ACES, “Filed” meaning successfully accepted by the system or “Rejected” meaning the ACES has rejected the return due to validation error. The rejected returns can be resubmitted after corrections.
6. On the successful submission of a return, an acknowledgment with a number in the format ‘’registration number_Type of return_Month and Year of the return’’ will be shown.
7. The Service Tax revised returns can be filed once as per rules up to 90 days from the date of filing the initial return.
8. There is no provision for submission of revised return after 90 days. In such cases, if assessee finds that he has made some mistake, he should pay the amount by GAR-7 challan with Interest and inform department suitably.

Responsibility of the Assessee: - It is the legal responsibility of the assessees, who are required to file returns, to file it within the due date as prescribed under law. It may, however, be noted that merely uploading the returns will not be considered as returns having been filed with the department. A return will be considered as filed, when the same is successfully accepted by the application as “Filed” and the relevant date for determining the date of filing of return will be the date of uploading of such successfully “filed” returns. In case a return is “rejected” by the application, the date of uploading of the rejected return will not be considered as the date of filing, rather the date of uploading of the successfully “filed”, return (after the assessee carries out necessary corrections and uploads it again) will be considered as the actual date of filing.

Even if there was no business during the period, assessee will have to file ‘NIL’ return as long as registration certificate is valid.

Late fee and penalty for filing late return: - Section 70(1) of Finance Act, 1994, as amended w.e.f. 08.04.2011 provides that in cases where returns are filed after due date, late fees not exceeding ₹ 20,000/- is payable for delayed filing of return, as may be prescribed. The late fee payable is as follows – (a) Delay up to 15 days – ₹ 500/- (b) Beyond 15 days and up to 30 days – ₹ 1000/- (c) Delay beyond 30 days – Rs,1000 plus ₹ 100 per day of delay beyond 30 days, from 31^st day onwards. This ₹ 100 per day continues till limit of ₹ 20,000 is reached.

If return of Service Tax is not filed within prescribed period, penalty is leviable u/s 77(2) which can be up to ₹ 10000/-. If late fee is paid, penalty will not be imposed.

Help for Assessees: - CBEC has set up a Service Desk with National toll-free No. 1800 425 4251, which can be accessed by between 9 AM to 7 PM on all working days (Monday to Friday). Besides, e-mails can be sent to [email protected] . All the calls/emails will be issued a unique ticket number, which will be attended to by the Service Desk agents for appropriate response.

The time has come for filing of first half-yearly Service Tax return i.e. April, 2015 to September, 2015. It is therefore, vide this article, has tried to emphasize the assessee the importance of filing of Service Tax return within due date.

(The above article is authored by Ganeshan Kalyani and he can be reached via email on [email protected]).