GST UPDATE ON TRANSITIONAL CHANGES IN SERVICE TAX

GST UPDATE ON TRANSITIONAL CHANGES IN SERVICE TAX

Circular no. 207/5/2017-Service Tax dated 28^th September, 2017 has been issued to clarify the most awaited ambiguity relating to admissibility of credit on services covered under reverse charge for the month of June, 2017. It is worthwhile to mention here that the last date of payment of service tax under reverse charge for the month of June, 2017 was 5th/6th July, 2017. Credit on these services can also be availed after making payment of tax. Thus, there was ambiguity on the admissibility of credit on such services, on which tax was paid after 1st July but before 5th /6th July, 2017.

Now the above mentioned Circular has allowed the credit on such input services received under reverse charge if the following conditions are satisfied:-

·        The services should have been issued upto 30/06/2017.
·        The payment of invoice raised in respect of these services should also have been made upto 30/06/2017.
·        The service tax on these services should have been paid after 1st July but before 5th/6th July, 2017.

If the above conditions are satisfied, credit of said service tax can be claimed by following the below-mentioned procedure:-
·        The ST-3 return filed for the month of April to June, 2017; shall have to be revised and the credit shall have to be shown in the revised return.
·        After revising the service tax return, the said credit shall have to be shown in TRAN-1.
·        In case TRAN-1 is also filed; the same has to be amended upto 31st October, 2017.

In the instant case, the last date of filing the ST-3 was 15th August, 2017. It is worth noting here that the benefit of this circular is being extended even to those assessees who filed the ST-3 return after 15th August, 2017 till 31st August, 2017. The assessees have not considered the above referred credits in the return so filed. Therefore, return is required to be revised. The time period for revision of return is 45 days from filing of return. In this case, going by the due date of ST-3 return (which is 15.8.2017); the due date of revising the return has also expired. It is therefore provided that the last date of filing the service tax return for the period from April, 2017 to June, 2017 shall be deemed as 31/08/2017. Therefore, in case where assessee has already filed his ST-3 returns by 31st August, 2017; they can now file the revised return within 45 days from 31/08/2017 i.e. till 14^th October, 2017.

On revising the return such credit then should be indicated in part I of ST-3 after which the assessee can fill in such details in TRAN-1. If they have already filed TRAN-1; it is required to be revised by 31st October, 2017 as stated earlier.

It is worthwhile to mention here that the benefit of this circular will not be admissible if:-
·        The payment of the invoice value is done after 30th June, 2017; or
·        The payment of tax under reverse charge is being done after 5^th or 6^th of July, 2017.

Further, in the case of assessees who were not registered under ACES, who want to make payment of service tax on or after 1-7-2017, they may avail of the category of “non assessee registration” in the registration module of ACES.

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GST UPDATE ON TRANSITIONAL CHANGES IN SERVICE TAX

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