Scrutiny of service tax returns - reg - Service Tax - Dy.No.170/Com(ST)/08

Scrutiny of service tax returns - reg Dy.No.170/Com(ST)/08 Government of India Ministry of Finance Department of Revenue Central Board of Excise Customs (Service Tax) New Delhi Dated : June 12, 2008 Subject: Scrutiny of service tax returns - reg. It may be recalled that Board vide letter F.No.137/27/2007-CX.4 dated 8.2.2007 had circulated the frequency and the norms for undertaking scrutiny of the returns filed, especially by the large service taxpayers. The said letter prescribed the basic checks (such as checking of filing or non-filing of returns, late filing, arithmetical inaccuracies, verification of tax payment) that were to be conducted to verify the level of tax-compliances. The checks prescribed are such that they can be done by the officers based on the return data itself, without informing the taxpayer. Only in case of detection of short-payment of tax, data error, arithmetical inaccuracies, the taxpayer need be contacted. 2. At the recent conference of the Chief Commissioners and Directors General, it was noted that there are reports that in many cases the service tax officers/formations are contacting taxpayers, soon after filing of the return (and without detecting any short/non-payment of tax or error) and conveying the message that though the return has been received, it would be accepted subject to detailed scrutiny. Such an action on the part of the officers is likely to give an impression to the taxpayer, that he is required to visit the service tax officer for getting his return scrutiny completed, even though there is no error in the return or short-payment of tax on part of the taxpayer. 3. In view of the foregoing, the undersigned is directed to inform you that strict instructions may be issued to the filed officers not to resort to such practices. Only in the event of detection of a short-levy non-levy of service tax or arithmetical errors or errors in filing up the return form, the taxpayer should be contacted by an officer not below the rank of a superintendent of Central Excise and record of such communication may be maintained by the officer. Such record should be periodically reviewed by the senior officers. Any deviation from this practice would be viewed seriously. 4. This issue with the approval of the Chairman (CBEC). Yours faithfully, (Gautham Bhattacharya) Commissioner (Service Tax)