Excise return

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 December 2015 Hello experts,
Plzz clarify the difference between Return ER-1 and ER-3, in which condition the assessee need to file ER-1 and in which ER-3,

Thanxx in Advance

Arpit Shah

Arpit Shah (Expert)
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05 December 2015 Common return for ER-1, ER-3 & ST-3, Change in ST Return Periodicity – Govt invites suggestion

F No 201/05/2011-CX.6, Dated- 13th April, 2012
Subject: Revised format for Excise and Service Tax Return- regarding
The attached document is a draft circular containing details of proposed amendments to harmonize the ER-1, ER-3 and ST-3 returns so that a single common return can be prescribed instead of these three returns as measure of simplification of the Business Processes in respect of filing the Return by assesses. The draft is being placed in public domain for widest possible circulation and an extensive debate from all stakeholders in trade and industry as also from all the field formations of the department. All suggestions and feedback from Trade as well as Field Formations, may please be emailed at dircx1@nic.in or at vp60singh@gmail.com latest by 15th May 2012. The feedback and suggestions received would be considered for revising the proposed amendments.
Encl: Revised Format [in pdf version]
————————————————————————-
Circular No / /2012-CX
F No 201/05/2011-CX.6 Dated- 13th April, 2012
Central Excise assessees are required to file returns in the Format ER-1 to ER-3 and the Service Tax Assessee file the Return in ST-3 format as follow:
S No Return Frequency To be filed by
1 ER.1 Monthly All the assessess except those filing ER2 or ER.3
2 ER.3 Quarterly Units availing exemption on the basis of value of Clearances
3 ST-3 Six Monthly All the Service Tax Assessee’s
2.0 It has been proposed to harmonize the ER-1, ER-3 and ST-3 returns so that a single common return can be prescribed instead of these three returns as measure of simplification of the Business Processes in respect of filing the Return by assesses. The revised return EST- Return is Annexed.
3.0 One of the purpose of the return is to ensure the payment of the duty/ service tax in time. Accordingly it is propsed to also align the payment cycle and the return cycle. Under Central Excise Rules the returns and payment cycles are aligned already.
4.0 On Service Tax side at present every asssessee files the six monthly return (Rule 7 of Service Tax Rules 1994) whereas the payment cycle is as follows as per the Rule 6 of the said rules
a. Quarterly for the individual, proprietary firm and partnership firm
b. All others monthly.
5.0 Following amendments are proposed in the Service Tax Rules, 1994 to align the payment and return cycles:
a. Quarterly payment and quarterly return for assesses who had paid Service Tax of Rs 25 lakhs or less including the the payments made by utilizing the CENVAT credit, during the preceding financial year.
b. Monthly payment and monthly return for all other assesses who had paid Service Tax of more than Rs 25 lakhs including the the payments made by utilizing the CENVAT credit, during the previous financial year.
c. Quarterly payment and quarterly return for all the new assesses.
6.0 You are requested to circulate the contents of this circular along with the revised format of the return amongst the officers and trade formations in your jurisdiction and solicit their comments on the proposed amendments.
7.0 You may forward your comments on the formats and proposed amendments to the undersigned by e-mail at dircx1@nic.in or at vp60singh@gmail.com latest by 15th May 2012.
8.0 Hindi version of the circular will follow.
Yours faithfully
V P Singh
Under Secretary (CX.6)
1
Period of Return
2
Central Excise/ Service Tax
3
Name of the Assessee
4
Registration Number Central Excise
Service Tax

EST Return for Central Excise and Service Tax
Description of Goods/ Services CETSH Exemption Claimed Effective rate of duty/ Service Tax Quantity Cleared Total Taxable/ Dutiable Value CENVAT/
Service Tax payable
Remarks

5 Computation of CENVAT/ Service Tax Payable
6 Details of CENVAT Credit taken and utilized

Details of Credit
CENVAT/ Service Tax AED
(TTA)
NCCD ADE* Additional Duty** Edu.
Cess***
1
Opening Balance
2
Credit on Inputs
3
Credit on Capital Goods
4
Credit on Input Services
5
Credit from inter unit transfers in LTU
6
Credit taken under Rule 12BB(2) of CER, 2002
Credit Utilisation for payment:
7
Of CENVAT on goods/ Service Tax on Output Services
8
When inputs/ Capital goods cleared as such
9
Of amount under Rule 6 of CCR, 2004
10
Adjustments under STR
11
Other payments
12
Inter unit transfer of Credit by LTU
13
Closing Balance
7 Details of Payment made
Description
Duty
Code
Account
Challan
BSR
Code
Total
Paid
Credit
Cash
Date
Number
CENVAT
Service Tax
Education Cess
Secondary Education Cess
Cess
NCCD
Other Duties & Cess
Adjustment under STR
Arrears Rule 8
Other Arrears
Interest Rule 8
Other Interest
Other payments
*ADE levied under clause 85 of Finance Act 2005
**Additional duty of Customs levied under Section 3(5) 0f Customs Tariff Act, 1985.
***Education Cess & Secondary education Cess

INSTRUCTIONS
1. Indicate the period of return at Serial Number (1).
2. At Sl No (2) indicate whether the return is filed for Service Tax or Central Excise. For assessee’s who have to file return both as service tax assessee and as Central Excise Assessee separate returns shall be filed for service tax and central excise.
3. At Sl No (5) following instructions need to be followed:
a. In case more than one item is manufactured, the details of all the items manufactured or service provided should be indicated in separate row.
b. If a specific product / service attracts more than one rate of duty, then all the rates should be mentioned in separate rows.
c. The goods cleared for export under bond should be indicated separately by mentioning the same in column (5)
d. In case the intermediate goods are cleared by a large taxpayer under sub rule (1) of rule 12BB, the details of such clearances may be mentioned separately. Under columns (5) of the table the words ‘inter unit transfer by large taxpayer under rule 12BB (1)’ may be mentioned.
e. If a specified product attracts different rates of duty, within the same month, then such details should be separately mentioned.
f. 8-digit CETSH Number may be indicated without any decimal point.
g. In case the goods are assessed provisionally, the details may be given separately in Table at serial number 5. In column (9) of Table at serial number 5, specify the Unique Identification number mentioned in the order for Provisional Assessment.
h. Goods cleared under compounded levy scheme, indicate the aggregate duty payable in column (8) as per the compounded levy scheme. The columns not applicable may be kept blank.
4. In column (7) of Table at serial number 3, the Total Taxable/ Dutiable value means:
(a) where goods attract advalorem rate of duty, the value under section 4 of Central Excise Act, 1944 (1 of 1944);
(b) where goods are covered under section 4A of the Act, the assessable value as worked out under MRP after allowing deductions as provided under section 4A of the Act;
(c) in case of goods for which the tariff value is fixed, such tariff value;
(d) in case of specific rated goods, the aggregated invoice value of the goods excluding all taxes;
(e) in case of combination of advalorem and specific duties, the transaction value under section 4 of the Act;
(f) in case of exports under Bond, the ARE-1/ARE-2/invoice value.
5. In Tables at serial numbers 7 the ‘Other duties’ paid/payable, as applicable, may be mentioned in order of: SED, AED(TTA), SAED, ADE, ADE on specified products levied under clause 85 of Finance Act, 2005, Cess on Excisable goods
6. In column (4) in Table at serial number 5, indicate the effective rates of duty. Columns which are not applicable, may be left blank.
7. The details of the challans for duty payment should be mentioned in Table at Sr.No. 7. In Table at S.No.7, separate challans should be used for pre-deposit of duty for the purpose of appellate remedy, for paying dues for approaching Settlement Commission and for other payments.
8. Other payment includes penalty, redemption fine, and pre-deposit.
9. In the Tables at serial numbers 7, the BSR codes of the Bank branch should be indicated when the instructions to this effect are issued.

Arpit Shah

Arpit Shah (Expert)
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Arpit Shah

Arpit Shah (Expert)
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05 December 2015 Central Excise circular on manner of scrutiny of ER1, ER2 and ER3 returns and returns submitted by dealers

Manner of Scrutiny of ER1, ER2 and ER3 returns and returns submitted by Dealers by the proper officer (Circular No. 887/07/2009- CX, dated 11-5-2009)
These guidelines supersede the earlier instructions issued vide Circular No.818/15/2005- CX from F.No.224/1/2005- CX.6 dated 15th July, 2005 and Circular No.249/83/96- CX issued from F.No.206/1/96- CX.6 dated 11.10.96. These guidelines seek to explain the content of the Return Scrutiny Manual, which has been prepared and is now being circulated to all the field formations vide this circular.
2. Sub rule 3 of Rule 12 of the Central Excise Rules, 2002 provides for scrutiny by the proper officer to ensure correctness of duty assessed by the assessee on the goods removed. The returns would be received by the Superintendent of Central Excise who is the proper officer under sub rule (1) of Rule 12 to scrutinize the return. The Inspectors posted in the Range would assist him in this task. As clarified by the earlier instructions, the scrutiny of the return is required to be carried out in two stages, viz., (i) the scrutiny of the return and (ii) scrutiny of assessment. The rationale for this two stage scrutiny and its clear distinction from audit is explained in Chapter 1 of the Manual.
3. In the preliminary scrutiny (to be called the `scrutiny of return’), all returns would be scrutinized as per the checklist given in Annexure-1 to this Circular, which is also contained in Chapter 2 of the Manual. This would involve checking the correctness of the information furnished, the timeliness of payment of duty and the timeliness of filing the return. For example, whether the 8-digit CETSH exists, and if so, whether the rate of duty is correctly mentioned. It would also involve checking the arithmetical accuracy of information contained in the return e.g. duty payment or the break-up of duty paid in cash and through CENVAT credit. Verification of the correctness of the provisional assessment order in respect of the assessee would also form part of the mandate of preliminary scrutiny. After the checklist at Annexure-1 has been executed, it should be completed and duly signed by the Superintendent. Wherever any discrepancies/ deficiencies are noticed, it shall be the responsibility of the Range Superintendent to take appropriate action including safeguarding the revenue.
4. It is visualized that as soon as the Automation of Central Excise and Service Tax (hereinafter referred to as ACES) project is implemented, preliminary scrutiny would be done by the system. The manner in which the system would conduct the scrutiny has been outlined in Chapter-3 of the Return Scrutiny Manual. Until the implementation of the ACES project, preliminary scrutiny would be done manually in terms of the procedure laid down in the para-3 supra. Chapter-2 of the Return Scrutiny Manual explains in detail the manner in which the manual preliminary scrutiny is to be done.
5. The second stage scrutiny called the `scrutiny of assessment’ would be confined to returns selected on the basis of mini risk parameters, which are given in Annexure-II and are also contained in Chapter-2 of the Return Scrutiny Manual. Once the ACES project is implemented, the returns would be selected automatically by the system and list in descending order of risk would be forwarded every month to the Commissionerate for final selection. It would be the responsibility of the jurisdictional Joint/Additional Commissioner to decide on the number of returns to be taken up for detailed scrutiny by the Ranges keeping in mind the availability of administrative resources which can deliver quality scrutiny.
6. In selecting the returns, the jurisdictional Joint/Additional Commissioner should not select returns of those units which are to be mandatorily audited. Further, once a return of an assessee has been selected, the return of the assessee should not be selected again for the next 12 months. The Joint/Additional Commissioner should also assign some returns of selected EOUs (ER2 return) and quarterly returns of dealers to the Ranges for scrutiny, selected on the basis of local risk factors. Chapter 4 of the Return Scrutiny Manual provides a detailed check list for scrutiny of ER1/ER3, ER2 returns and quarterly return submitted by Dealers.
7. The detailed checklist contained in Chapter-4 identifies the check-list for scrutiny and also indicates the documents that need to be perused. The Superintendent of Central Excise should verify the details as per the checklist and record the observations against each of the scrutiny activity. The documentation of the return scrutiny findings is extremely important. Besides raising non-compliance issues, it may also initiate referrals for Audit and Anti-evasion. Normally, no visit should be made to the unit for carrying out return scrutiny and documents required should be called for verification in terms of sub-rule (4) of Rule 12 of the Central Excise Rules, 2002.
8. Scrutiny done as per the checklist along with the observations should be signed by the Divisional Assistant/Deputy Commissioner who should also indicate the action taken on the basis of the scrutiny outcomes.
9. The field officers should carefully go through the Return Scrutiny Manual and follow the scheme of verification provided in the Manual.