Introduction
1. The Central Board of Excise and Customs (CBE&C) has come out with the Service Tax Return Preparer (STRP) Scheme, 20091 to sort out the problem of unemployment prevailing in the country. To pave way for the Scheme, section 71 was inserted by the Finance Act, 2008 with effect from 10-5-2008 in the service tax provisions enshrined in the Finance Act, 1994. At the face of it, the Scheme seems to be lucrative since as an incentive, the STRP is obliged to charge a minimum fee of one thousand rupees per return as recommended by the CBE&C though the assessee may be required to pay more fee as mutually agreed upon between him and the STRP keeping in view the work involved. The STRP Scheme is based on the earlier Tax Return Preparer Scheme, 2006 meant for filing income-tax returns by the TRPs. Resource Centre being the Directorate General of service tax or any other Directorate so designated and the ‘Partner Organisation’ plays a significant role in making the Scheme successful. The target of the Scheme is the assessee’s who will avail the services of the STRPs and make payment of fees for the services so availed.
Who can act as Service Tax Return Preparer ?
2. Any individual who has been issued with a STRP certificate and a unique identification number by the partner organisation is eligible to carry on the profession of preparing the returns of income2 in accordance with the provisions of the Scheme.
u Educational qualification - The person desirous of becoming a STRP should have successfully completed education up to senior secondary level under 10+2 education system. In other words, even non-graduates are eligible to act as STRP if certain parameters are fulfilled. This gives leverage to persons with low educational qualification. It would have been better if the subject of service tax, in its elementary stage is taught at the level of 10+2 education system so as to familiarize the interested persons with the nuances of service tax before-hand.
u Age Limit - The Scheme provides for age-limit, thus, encouraging the younger generation to seek more opportunities. In other words, a person who is aged more than thirty-five years on the first day of October immediately preceding the day on which applications are invited for enrolment, training and certification shall not be eligible to apply. However, the restriction of age is not applicable in case of a person who has superannuated/retired from the department of the Customs and Central Excise.
Enrolment, Training and Certification
3. Keeping in view the age restrictions, as mentioned above, the ‘Partner Organization’ is authorised to invite applications from any Indian citizen having prescribed educational qualification (including those possessing Tax Return Preparer certificate under the Tax Return Preparer Scheme, 2006) for the purpose of enrolment, training and certification so that he may act as the STRP.
u Criterion for Enrolment - After the applications are received from the eligible persons, the ‘Partner Organisation’ shall, in accordance with the criteria and conditions laid down by the resource centre with the prior approval of the CBE&C, carry out the screening of the applications so received and select the persons to appear in a test, if required, for their enrolment.
u Training - After enrolment, the persons so enrolled shall be imparted training at the centres, as far as possible, of their choice which they have indicated in their applications by the ‘Partner Organisation’ in accordance with the curriculum provided by the resource centre.
u Awarding of Certificate - After completion of training, the ‘Partner Organisation’ shall conduct an examination of the enrolled persons in accordance with the procedure laid down by the Resource Centre. This shall be followed by issuing a STRP certificate and a unique identification number to the persons declared successful in the examination.
Duties and obligations of the Service Tax Return Preparer
4. Under the Scheme, a number of duties and obligations have been assigned to the STRPs. They include :—
u to prepare the return with due diligence and furnish it to the Superintendent of Central Excise having jurisdiction over the assessee, or to such other person as may be directed by the Resource Centre with the approval of the Board.
u to affix his signatures on the return prepared by him;
u to hand over a copy of the return to the concerned person and also to hand over the acknowledgement of having furnished the return to him;
u to retain a copy of the acknowledgement of having furnished the return;
u to maintain record of the following, in respect of returns prepared and furnished by him:
l the names of assessees whose returns have been prepared and furnished by him during that month;
l the Service Tax Code (STC) number and premises code of such assessees;
l period for which return is filed;
l date of furnishing the return;
l authority with whom return is filed;
l amount of tax payable;
l amount of tax paid;
l the fee charged and received by him.
Note: The STRP is required to furnish a statement of particulars of records as maintained by him for every month on or before the seventh day of the immediately following month to the Resource Centre.
Duties and obligations of assessee
5. The Scheme prescribes certain duties and obligations of the assessee also. Thus, an assessee who opts to furnish his return through any ‘Service Tax Return Preparer’ shall give his consent to him for preparation and furnishing of return and before verifying and signing the return, ensure that the facts mentioned in the return are true and correct. Further, he shall not furnish a revised service tax return under rule 7B of the Service-tax Rules through a STRP unless he has furnished the original return through such or any other STRP.
Cancellation of Certificate
6. In case, a STRP is deficient in his work and shows signs of misconduct, he may be issued warning by the Resource Centre leading to cancellation of certificate in any one or more of the following circumstances :—
u if he fails to give a copy of the return to the assessee;
u if he prepares a return but fails to affix his signature thereon;
u if he fails to furnish his name and unique identification number in the return prepared by him;
u if he fails to enter any information made available to him by the assessee, correctly in the return prepared by him;
u if he makes repeated mistakes relating to computation of income in the returns prepared by him;
u if he is engaged in any financial irregularity, forgery or fraud;
u if he wilfully attempts to furnish incorrect information in return;
u if he is involved in any other irregularity which, in the opinion of the Chief Commissioner or the Commissioner of Central Excise, is grave in nature;
u if he fails to comply with the directions issued by the Resource Centre from time to time;
u if he fails to upgrade his skills as required by the Resource Centre from time to time.
Role and Responsibilities of Resource Centre
7. Under the STRP Scheme, 2009, CBE&C is empowered to designate the Directorate General of Service Tax (DGST) or any other Directorate to act as ‘Resource Centre’ for the purpose of day to day administration of the Scheme. In addition, the ‘Resource Centre’ shall undertake the following specific functions, besides any other function which may be assigned by the CBE&C for implementing the Scheme :—
(i) to specify, with prior approval of the CBE&C,
u the number of persons to be enrolled during a financial year for training;
u the number of centres for training and their location;
u the number of persons to be trained at each centre for training;
(ii) to specify the curriculum and all other matters relating to the training;
(iii) to maintain the particulars relating to the STRPs. Alternatively, it shall direct the Partner Organisation to maintain such particulars, as may be necessary to assess the performance of the STRPs.
Partner Organisation
8. In the successful implementation of the STRP Scheme, 2009, the ‘Partner Organisation’ has a critical role to play. It is an organisation or agency selected by the CBE&C, with whom an agreement has been entered into either by the CBE&C or the Resource Centre authorising it to act as the Partner Organisation. It shall function under the overall guidance and control of the Resource Centre and follow the instructions issued to it by the Resource Centre from time to time about implementation of the scheme.
u Responsibilities - The ‘Partner Organisation’ is directly responsible for enrolment and training of the STRPs and for issuing of certificates as well as granting of unique identification number to the successful persons. It shall maintain the profile of the STRPs during their training and monitor their performance while performing its functions to the satisfaction of the Resource Centre.
u Termination of Agreement - If the CBE&C is of the opinion that the ‘Partner Organisation’ has failed to perform its functions properly, it may on the recommendation of the Resource Centre, terminate the agreement with the Partner Organisation. Thereafter, it may enter into an agreement with any other ‘Partner Organisation’ or assign its functions to the Resource Centre.
Conclusion
9. Service Tax Return Preparer Scheme, 2009 opens up the doors of self-employment for the individuals who are interested in starting the profession of service tax return preparers. The minimum fee of Rs. 1,000 per return is quite handsome though the preparer is at liberty to charge more from the assessee depending upon the work involved. It is, however, apprehended that the assessee may, in actuality, offer even less than Rs. 1,000 and the preparers may be ready to accept the lesser remuneration for fear of losing the work. Thus, a stern check is required to handle such cases, if and when they come to the knowledge of the Resource Centre. The return preparers are required to keep themselves up-dated after receiving training and certificate since the service provisions undergo frequent changes from time to time. The success of the Scheme depends upon as to how many assessee come forward to avail the services of the ‘STRPs’ because the exemption limit of Rs. 10,00,000 takes out a number of assessee from service tax coverage and the persons who cross the exemption limit, thus, becoming eligible to file returns, may have their own service tax department equipped with qualified staff. In actuality, the assessee crossing exemption limit, except those on border, are certainly not small scale service providers and in all probability, they may not need the services of the ‘STRPs’ for they can afford to recruit qualified staff for handling service tax matters.
CAclubindia
