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ST - 3 Urgent

sankalp (Tax Consultant ( Income Service Sale Tax )) (107 Points)

23 April 2011

We have register with service tax authority but we haven’t cross ST turnover Rs 12,000,00/- also we have not charge ant ST to our client in above situation we liable to pay ST and can we file the ST 3 OR not if yes which amount I have to show in st - 3 becoz we not receive any st from client

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26 Replies

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 23 April 2011

1) ST exemption limit is 10 L

2) you have to file ST-3 return every 6 month, even nil returns

3) in case u are liable to pay st, then u have to pay it, from your own pocket, by reverse calculation

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NIKITA (CA ) (302 Points)
Replied 23 April 2011

As u have not charged service tax 4m clients, now u hv 2 assume dat amount received is inclusive of service tax and pay service tax if ur receipts hv exceeded 10 lakhs in previous year and service tax return has 2 be filed half yearly till 25th of next month in every case..

Alok Siddapur (Consultant) (229 Points)
Replied 24 April 2011

First check whether services rendered during the previous year exceeds 10L. If so then service tax is payable on all the receipts during the current year otherwise ST is payable on only such amount in excess of 10L. If you have not received amount of ST from the client then amount received by you shall be deemed to inclusive of ST and ST has to be calculated using the formula

Amount received * 10.3/110.3

KIYOSH (TAX CONSULTANT) (332 Points)
Replied 24 April 2011

Also remember that you have to pay 13% pa interest for late payment of service tax

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 24 April 2011

Please remember to avail CENVAT benefits and adjust the same when you pay for 2 lacs, i.e above 10 lacs exemption limit. As indicated in the previous threads, make use of the reverse working for the service tax calculation.

rengaraj r.k

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sankalp (Tax Consultant ( Income Service Sale Tax )) (107 Points)
Replied 24 April 2011

Thanks all

CA. Amit Chimnani (PARTNER ) (205 Points)
Replied 25 April 2011

Sec. 70 read with rule 7 says A person liable to pay service tax is required to file ST-3.if exemption limit (turnover )has not crossed no liabilty to pay service tax will arise, hence no return is required.

Nil return is filed when assessee has turnover in excess of exemption limit i.e liable to pay service tax but in a particular half year no services are provided or no receipts are made ,in that situation nil return will be filed.

In case of sankalp there is no liabilty to pay service tax ( assumed exemption limit of Rs.10,00,000/- is not crossed) hence no need to file return.

NIKITA (CA ) (302 Points)
Replied 25 April 2011

As per section 70(2) every service provider who is registered with service tax department has to file service tax return even if service tax payable is nil.

CA. Amit Chimnani (PARTNER ) (205 Points)
Replied 26 April 2011

An assessee who has opted to avail the threshold exemption and has not crossed the maximum limit of Rs. 10 lakhs during the financial year, need not file a return.Registration with service tax department in not a criteria for filing return.

CMA. Dinesh S Adhikari, ACMA (Cost & Management Accountant) (1257 Points)
Replied 26 April 2011

Thanks Experts for you answers but i have on question/doubt here, i.e., one practicing ca told me that if we have taken Service Tax number then we will have to collect Service Tax from clients and pay to Govt.

But you are saying that we will not have to pay any service tax even we have take ST number, if we does not cross maximum limit.

Please clarify what is correct. Please provide section reference also, if possible.

Regards

Dinesh

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CA. Amit Chimnani (PARTNER ) (205 Points)
Replied 26 April 2011

Dinesh, see sec70 read with rule 7 .but kindly refer directly from act private publishers may confuse you.It is quite clear that assessee is liable to pay tax when exemption limit is crossed i.e 10 lakhs.otherwise no tax is payable.

if we have taken Service Tax number then we will have to collect Service Tax from clients and pay to Govt, IS NOT CORRECT.

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RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 26 April 2011

What is the limitation period for issuing show cause notice under service tax act. For e.g Haly early Return April 09 to October 09 is filed by the Assessee on 25th November 2009 and for this period if SCN is issued by the Dept in April 2011, will it be hit by period of limitation or within the time limit. I need clarification. rengaraj.r.k

CA. Amit Chimnani (PARTNER ) (205 Points)
Replied 26 April 2011

Return for the period April to september can be filed by 25th october and october to march by 25th april. Time limit for issue of SCN is within 1 year from the relevant date ..Mr.Rengaraj in your case relevant date will be date of filing the return .suppose return was filed on 25th November (with Late fee) SCN can be issued till 24th November 2010,if it is issued in april 2011 it will not be valid.

But in case of fraud ,wilfull mis-statement etc.time limit is 5 years from relevant date .

so if dept. proves that there is fraud etc SCN will be valid.

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 26 April 2011

No, it is not the case of fraud or collusion or wilful mis-statement. And the return is filed well within the time limit i.e relevant date is 25th October 2009. I know it is one year the question arose due to the fact that the Department has issued the SCN on 15th April 2011 covering the material period 1st april 2009 to 31st march 2010. So it is sure that we can fight the case stating that it is hit by "period of limitation".

Thanks Mr CA.Amit