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NIL Service tax returns

anonimas (abc) (61 Points)

20 April 2010

Hello,

I have following queries.

I have service tax registration number, but my yearly revenue liable for service tax has not exceeded Rs. 10 lac.

1) It is mandatory to file NIL returns even if the yearly revenue liable for service tax has not exceeded Rs. 10 lac?

2) If so, why is it mandetory?

3) What happens if such NIL returns are not filed for one half and filed for the next half?

4) Can the filing NIL returns be relaxed without cancelling the registration? If yes, what is the procedure for this?

I consider that filing the NIL returns even when the limit has ot been exceeded an inconvenience as ours is a very small setup, hence these questions.

Thanks in advance for the reply from the experts.

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13 Replies

P.Bashista (Advocate) (367 Points)
Replied 20 April 2010

Yes it is mandatory to file return under ST-3 even if it is Nil.

The late fee fine will be imposed on you.

If you think that your return would not cross the Rs. 10,00,000/- threshold then you can even surrender your service tax registration and avoid any kind of fine for not filing returns.

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Padmanabhan Gopathy (Chareterd Accountant) (29 Points)
Replied 21 April 2010

Dear Querist,

1. It is mandatory to file NIL returns even if the yearly revenue liable for service tax has not exceeded Rs. 10 lac

2. It is mandetory, because you are registered with the Department.

3. If such NIL returns are not filed for one half and filed for the next half, you will not be spared of action by the department, as long as filing the Nil Return is mandatory.

4. Filing NIL returns cannot be relaxed without cancelling the registration. Mind you, you are caught in the spider web.

5. If u r 101% sure that your revenue shall not exceed Rs.10 Lac, then only u may think of surrendering the registration certificate.

Padmanabhan Gopathy (Chareterd Accountant) (29 Points)
Replied 21 April 2010

Dear Querist,

1. It is mandatory to file NIL returns even if the yearly revenue liable for service tax has not exceeded Rs. 10 lac

2. It is mandetory, because you are registered with the Department.

3. If such NIL returns are not filed for one half and filed for the next half, you will not be spared of action by the department, as long as filing the Nil Return is mandatory.

4. Filing NIL returns cannot be relaxed without cancelling the registration. Mind you, you are caught in the spider web.

5. If u r 101% sure that your revenue shall not exceed Rs.10 Lac, then only u may think of surrendering the registration certificate.

BK Bhargava (Business) (57 Points)
Replied 22 April 2010

Dear friends,

Nice comprehensive reply by Mr. Padmanabhan CA.

My query is:

Normally, It is advised by service tax officials If you have taken number for reason that in past service tax liability arose. It shall be presumed that you are covered under servicce tax and your turnover from 0 to any amount ( Even below ten lacs) shall be taxable. Collect service tax and deposit. Even if your turnover in that very financial year is below general exemption to all say 10 lacs. Filing of return is mandatory and essential statutory compliance.

Is basic exemption available to all in each financial year from 0 to 10 lacs and thereafter service tax liability begins.

What is the principal to get basic exemption for such assessee who have surrendered Service tax number or are still carrying on with same despite having below limit in succession for the last 2-3 years.

Clear advice on this issue is sought for to benefit number of clients who are unnecessarily making service tax compliance despite below taxable turnover accordingly request is placed here...........

Regards

AK Bhargava

Padmanabhan Gopathy (Chareterd Accountant) (29 Points)
Replied 25 April 2010

Dear Bhargavaji,

Your inference in the first line is correct. Unfortunately, the officials in the departments are also not fully aware of the tax implications. It is really a sad thing that whatever query you put to the officials in the department, you get the same reply : "Yes. You are liable."

In this connection, I am enclosing a circular issued by the department in 2007, when the threshold limit was Rs.8 lac. Refer page no.16 Para no. 2.2. I think you will get answer to your query. (subject to amendements made subsequently)

Attached File : 1 service tax circulars2007.doc downloaded: 929 times

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amit jain (Chartered Accountant) (532 Points)
Replied 25 April 2010

it is necessary to file STR3 returns as non filing of returns will attract penalty. so it is better to file nil returns

BK Bhargava (Business) (57 Points)
Replied 28 April 2010

Dear Mr. Gopathy and Jain ji,

Thanks for reply and the way of reply with supporting files. To plan strategy w.e.f. this F/Y, we would request you to kindly spare some time and highlight those important things which are to the advantage of Assessee be kindly brought summarily in to their knowledge so that the same is adopted by them avoiding unnecessary compliance and complications too. I mean a time table with applicable conditions for SME category assesee to get rid of rigorous compliance in case it is really within that ambit that It ought to be made timely and cautiously. Hope you will extend it generously.

Regards and thanks again for useful information.

09425157452 AK Bhargava

bhargavaminerals @ gmail.com

BK Bhargava (Business) (57 Points)
Replied 28 April 2010

Dear friends,

My friend has just raised a query which is posted here for judicious solution:

He has recently purchased 2 trucks one JCB and one opened a goods transport agency also

for commision goods booking and providing trucks and issuing builty.

1.Receipts from Truck Operation (He Owns trucks ) Approx receipts ...... Below 10 lacs

2. Receipt from JCB machine operation apprx billing Below 10 lacs

3. Receipt from Goods transport agency Below 10 lacs.

Total apprx 25 lacs.

Following concepts are clear that:

1. Truck owners have complete immunity from Service tax irrespective of any turnover and It its gross receipts by rent or contract plying/hiring will not form of turnover liable to service tax.

2. Receipts of JCB rent covered under Tangible goods under service tax.

Contract work by JCB and its receipt taxable under service tax if beyond threshold limit.

3. Goods Transport agency not required to pay service tax if taxable turnover is below 10 lacs. This turnover excludes billing where service tax is paid by consignee.

Kindly advice the position and situation under Service tax and propose liability which may arise and compliance to be made.

Regards

AK Bhargava

M.M.SURANA (Director -Taxation ) (532 Points)
Replied 04 June 2010

Respected friends

In continuation pl. clarify me :

I have export TO of software for the half yly ending 30.09.2009 Rs. 1,001,860/- and 31.03.2010 half yly. I have 664,014/- . I got my registration in the month of March 2010. I want to know whether I should file my half yly. return for exempted TO, if yes whether it will attract penalty?

Himanshu Srivastava (TAX ADVOCATE) (23 Points)
Replied 28 May 2012

sir it is clearly mentioned in the st. act that if ur turn over is below than thershold limit then need not to pay service tax as well as st return sir it is very confusing and long discussing topic , yes that is the point that how department to know that ur turn over is below than taxable limit or zero , it is also a point

himanshu srivastava,tax advocate bahraich

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Himanshu Srivastava (TAX ADVOCATE) (23 Points)
Replied 28 May 2012

himanshu srivastava,tax advocate bahraich

CA Manish Khanna (Proprietor) (34 Points)
Replied 27 August 2013

Humbly differ from opinions expressed here. Relevant extract of circular quoted by CA P.Giopathy is reproduced...

6.1 The service tax return is required to be filed under Section 70 of the Act read with rule 7 of the Rules, by 'any person liable to pay the service tax'. This return is required to be filed on a half yearly basis, in Form ST-3. For the periods from April to September and October to March, it must be filed by the 25^th October and the 25^th April respectively. Further, ‘Input Service Distributor’ is also required to file this return. Persons who are not liable to pay service tax (because of an exemption including turnover based exemption), are not required to file ST-3 return.

Circular clearly clarifies the position. Relevant portion highlighted in bold

Ajay Rao (Accountant ) (21 Points)
Replied 22 October 2014

Dear Sir What is the procedure for filing nil service tax return. Kindly advise. Thanks Ajay

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NIL Service tax returns

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Dear Querist,

1. It is mandatory to file NIL returns even if the yearly revenue liable for service tax has not exceeded Rs. 10 lac

2. It is mandetory, because you are registered with the Department.

3. If such NIL returns are not filed for one half and filed for the next half, you will not be spared of action by the department, as long as filing the Nil Return is mandatory.

4. Filing NIL returns cannot be relaxed without cancelling the registration. Mind you, you are caught in the spider web.

5. If u r 101% sure that your revenue shall not exceed Rs.10 Lac, then only u may think of surrendering the registration certificate.

Dear Querist,

1. It is mandatory to file NIL returns even if the yearly revenue liable for service tax has not exceeded Rs. 10 lac

2. It is mandetory, because you are registered with the Department.

3. If such NIL returns are not filed for one half and filed for the next half, you will not be spared of action by the department, as long as filing the Nil Return is mandatory.

4. Filing NIL returns cannot be relaxed without cancelling the registration. Mind you, you are caught in the spider web.

5. If u r 101% sure that your revenue shall not exceed Rs.10 Lac, then only u may think of surrendering the registration certificate.

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