Service tax - my special series for IPCC/ final students (2)

SANYAM ARORA (“It's hard to beat a person who never gives up.”)   (20173 Points)

12 September 2011  

Hey friends - A very good evening to all the members of CCI family. After a hit completion of my part 1, i will like to introduce part 2 of my series.

In the part 1 we have discussed regarding basics of service tax, concept of ISD , Payment of service tax, etc. In this part we will discuss about return filing, CENVAT CREDIT.

So lets go for it my friends - 

Service Tax return -

The service tax return is to be filed under section 70 of the Act read with Rule 7 of the Rules, by any person liable to pay service tax. The return is to be filed on half yearly basis, in form ST 3 for the period from Apr to Sept and Oct to March and it must be filed by 25 oct and 25 apr respectively.

Further ISD is also required to file ST return.

A single ST return must be filed in respect of all taxable services provided by an assessee.

E - filing of return -

With referance to notification No. 43 / 2011 ST , Online filin of ST Return has ben made compulsory w.e.f 1st oct 2011.

Delay in filing of return - ( Rule 7C )

(a) Rs 500 for delay upto 15 days.

(b)1000 for delay upto 30 days.

(c)1000 + 100 per day beyond 30 days not exceeding2000.

Revised Return - ( 7B )

If any mistake is found in the return, it can be revised within 90 days of filing of original return.

CENVAT CREDIT -

►CENVAT credit (‘Credit’) was introduced to remove cascading impact of Central indirect taxes - Excise duty, in case of Imports ( CVD, SAD) and  Service tax.
 
 
►Concept of credit was first introduced in the year 1986 as MODVAT.
 
 
►Under the MODVAT regime, credit was restricted upto the manufacturing stage and was applicable to Excise duty credit only.
 
 
►MODVAT was renamed as CENVAT in the year 2000.
 
 
►Mechanism for credit under Service tax legislation was introduced in 2002.
 
 
►Further, the credit of Excise duty and Service tax got integrated in the year 2004 when Cenvat Credit Rules, 2004 (‘Credit rules’) were introduced.
 
Types of Duties and Taxes eligible for Credit -
 
 
►Service Tax on Input Services
►Excise Duty on Input and Capital Goods
►Education Cess (‘EC’)
►Secondary and Higher Education Cess (‘SHEC’)
►Countervailing Duty in lieu of Excise duty (‘CVD’)
►Additional Duty of Customs in lieu of VAT, etc. (‘SAD’)
 
 
►Credit of SAD paid on imports cannot be utilized against output Service tax liability
 
 
►Credit of EC/ SHEC paid on procurement of taxable services and/ or goods can be utilized only for payment of Output EC/ SHEC
 
 
►2 stages of credit:
 
 
►Availment – when the eligible credit is put in a pool
 
 
►Utilisation – when credit is utilised from the pool to pay the output tax
 
 
So Friends that brings us to the end of Part 2 of my series.
 
I hope that all of you will appreciate my effort.
 
Thanks & Regards
 
Sanyam Arora