LTU'S MAY DIE NATURALLY

[Dr. Sanjiv Agarwal]

Definition of and Eligibility for LTU

What is an LTU

LTUs are self-contained tax administration offices under the Department of Revenue acting as a single window clearance point for all matters relating to Central excise, income tax/ corporate tax and service tax. Entities are able to file their excise return, direct taxes returns and service tax return at such LTUs and for all practical purposes are assessed to all these taxes at these LTUs. Such units are equipped with modern facilities and trained manpower to assist the tax payers in all matters relating direct and indirect tax/duty payments, filing of documents and returns, claim of rebates/refunds, settlement of disputes etc. The scheme aims at reducing tax compliance cost and delays, and bringing out uniformity in the matters of tax/duty determination. An eligible taxpayer can opt to avail of the facility of LTU scheme. Large taxpayers, especially those having multi-locational units/ factories, take the benefit of the scheme by opting for it.

Taxes covered for Threshold Limit

Only following Central taxes levied by Union Government shall be counted for the purpose of indirect taxes -

• Central excise duty
• Service tax
• Customs
• Income tax and wealth tax
• Corporate taxes (fringe benefit tax, minimum alternate tax, wealth tax etc.)

Scope of LTU

Once a taxpayer gets the status of LTU, entire jurisdiction of central excise, service tax and direct tax matters stand transferred to the concerned LTU in respect of all its manufacturing units, service providing premises and other registered premises located throughout the country.

Under the scheme, it will be ensured that all aspects of business i.e., shall be carried out by LTU for all the units of large tax payer throughout the country. These include -

• Payment of tax
• Filing of refunds/returns/rebate
• Filing of intimations
• Scrutiny of returns
• Adjudication
• Audit
• Appeals
• Grant of permission
• Visits to units
• Grant of exemption etc.
• Acceptance of proof of export etc.

After registration with LTU, an officer (client executive) shall be appointed for each LTU who shall facilitate for any clarification, assistance or grievance redressal. The objective is to enable the LTU to have a single point interface vide Circular No. 878/16/2008-CX dated 21.11.2008. It has been clarified that the LTU's shall pay Central Excise and Service Tax dues electronically only, through internet banking. The selection of LTU for audit is based on risk assessment considering various parameters. The dates for audit are generally scheduled in consultation with the concerned LTU.

Service Tax Rules

Rule 10 as inserted by Service Tax (Fifth Amendment) Rules, 2006 vide Notification No. 28/2006-ST dated 30.9.2006 provides for procedure and facilities for large tax payer units as follows:

Rule 10 in Service Tax Rules, 1994 provide for procedure and facilities for LTUs. (Notification No. 28/2006-ST dated 30.9.2006). Accordingly,

1. A large taxpayer shall submit the returns, as prescribed under these rules, for each of the registered premises.
2. A large taxpayer who has obtained a centralized registration shall submit a consolidated return for all such premises.
3. A large taxpayer, on demand, may be required to make available the financial, stores and Cenvat credit records in electronic media, such as, compact disc or tape for the purposes of carrying out any scrutiny and verification, as may be necessary.
4. A large taxpayer may, with intimation of at least thirty days in advance, opt out to be a large taxpayer from the first day of the following financial year.
5. Any notice issued but not adjudged by any of the Central Excise Officer administering the Act or rules made thereunder immediately before the date of grant of acceptance by the Chief Commissioner of Central Excise, Large Taxpayer Unit, shall be deemed to have been issued by Central Excise Officers of the said unit.

LTUs in GST regime

When India moves on to GST regime, we will have CGST and IGST levied and administered by Central Government and SGST levied and administered by State Governments. As the draft reports suggest, there will be no concept of centralized registration as also LTU's. In view of the fact that there will be minimal physical interface between the assessee and revenue authorities as GSTIN will take care of most of the services except audits, scrutiny and investigations, LTU's may not be required in future. How big assessees will be handled under GST regime is yet not clear. In fact, lot of issues on GST are also in 'yet to be decided' mode.