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Corporate News *  GST: E-way bill implementation deferred due to glitches *  Budget 2018: No fiscal derailment, but a lot rides on GST; expect caution from RBI *   5 times number of airtports in india *   Govt will formulate a comprehensive gold policy to develop gold as an asset class *   Government to evolve to asign a unique id to every individual enterprise. *   1.48 lakh crore for rail budget. *   7148 Crore to be sanctioned to textile sector. *   3700 corore for SME industry *  16000 crore for free electricity connection *   Government ignored warnings over GST rollout: sources *  GSTR 3B questionaire introduced- To be filled before filing return *  Advisory mail  to all the taxpayers received from GSTN *   Advisory group on GST submits report, suggests changes *   GST lifted oil demand on higher vehicle sales, says report *   Moody’s gives thumbs up to GST, demonetisation  *   Pass on rate cut benefits immediately, companies tell traders *   Focus will now be on simplifying forms, IT processes under GST: Sushil Modi *  Tax rates lowered on consumer goods,only luxury goods taxed @ 28% *   Businesses can revise GST transition claim form now *  Multiplex owners in UP demand clarity on refund as tax exemptions go away after GST *   GST compliance: A case of much ado about nothing *  PM hints more relief for traders & businesses to ease GST compliance burden *  Infosys deploys more people in states to ease GSTN load *   Further reforms are needed for the GST to succeed *   GST impact! Massive stock clearance discounts on apparels, gadgets likely in December *  Kerala HC releases Detained Goods since State has No Power to make Rules to regulate Inter-State movement of Goods under GST *  Infosys is to blame for GST Network glitches, say government officials *   Publishers versus authors: Who will pay GST on royalty? *   कपड़ा निर्यातकों ने कहा, जीएसटी के कारण भारत से शिपमेंट में आ सकती है भारी कमी *   Tax professionals protest over GST returns filing in Gujarat
Subject News *   Don't charge GST from affordable housing buyers: Government to builders *   RBI policy: GST-hit small business get more time, money *   GST’s e-way bill set for a month-end rollout after tech glitches pushed it off-track on Feb 1 *  GST regime not user-friendly, says Bombay High Court *   Increase in  custom duty on mobile phones from 15% to 20%.  *   Custom duty on raw cashew imported shall be 2.5% *   Proposed to abolish Education Cess and Secondary And Higher Education Cess on imported goods. *   Social Welfare Surcharge at the rate 10% on aggregate duties of customs. *   The name of Central Board of Excise and Customs changed to Central Board of Indirect Taxes and Customs. *   Proposal to extend the reduction of  corporate tax 25% to companies having turnover upto 250 Crores. *   Department of commerece will develop national logistics portal. *   online loan sanction schmed linked with GSTn will be launched *   Railway university in Varoda 24 new medical colleges. *   bamboo is taken out of category of tree and 1200 crore for bamboo mission *   1400 crore for food processing *   minimum support price 150% of cost of production for agriculture *   2699 crore for irrigation to have water in each village. *   2 crore more toilet construction target *   11 lakh crore for agriculture loan *   2 crore more toilet construction target. *   1400 crore for development of organic farming *   farmers will get 50% extra of cost of their product as support price *   8 crore free gas connection in Ujawla yojana” *   farmers will get 50% extra of cost of their product as support price *   The report and recommendations submitted by the Committee on Handicrafts were accepted. *   Allows ITC of input services in the same line of business at the GST rate of 5% in case of tour operator service. *   GST rate for tamarind kernel powder reduced to 5% *    Exempt fumigation Services in a warehouse of agricultural Produce. *   To extend concesssional rate of gst on houses . *   Exemption limit enhanced from Rs 5000 to 7500 for services by resident welfare association  


Publish Date: 18 Mar, 2016
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An article by:-
CA Pradeep Jain
CA Neetu Sukhwani &
Neelam Jain

Although, with the government resorting to implement unified taxation regime GST in near future, it was hoped that the number of returns to be filed by an assessee would reduce substantially and this has been done in case of Central Excise Assessees which is highly appreciated by the trade and industry. However, at the same time, service tax assessees will be required to file Annual Return in addition to the half yearly returns presently filed by them. This has been done by amending Rule 7 of the Service Tax Rules, 1994 which will be applicable with effect from 01.04.2016. This article is an attempt to analyse the probable consequences of the amendment.
Glimpse of the Amendment:-Vide notification no. 19/2016-ST dated 01.03.2016, the Central Government has amended the Rule 7 of Service Tax Rules, 1994 by inserting certain new sub rules after sub rule (3) which read as follows:-
“(3A) Notwithstanding anything contained in sub-rule (1), every assessee shall submit an annual return for the financial year to which the return relates, in such form and manner as may be specified in the notification in the Official Gazette by the Central Board of Excise and Customs, by the 30th day of November of the succeeding financial year;
(3B) The Central Government may, subject to such conditions or limitations, specify by notification an assessee or class of assesses who may not be required to submit the annual return referred to in sub-rule(3A).”
Apart from this, amendments have been made in Rule 7B in order to facilitate revision of annual returns and in Rule 7C so as to impose late fees in case of delay in filing of annual return which is specified as amount calculated at the rate of one hundred rupees per day for the period of delay subject to maximum of twenty thousand rupees.
Analysis of the Amendment:-
·        Every assessee shall file an annual return in prescribed form. Government may exempt class of assessees who may not be required to submit annual return subject to conditions of limitations prescribed in the notification. It is pertinent to note that as per Notification no. 17/2006-C.E. (N.T.) dated 01.08.2006 as amended by Notification no. 42/2008-C.E. (N.T.), a Central Excise Assessee, who has paid duty of excise less than one hundred lakh rupees during the financial year to which Annual Financial Information Statement relates is exempted from filing the said statement in Form ER-4 that is required to be filed latest by 30th November of the succeeding year as per the provisions of Rule 12(2)(a) of the Central Excise Rules, 2002. Accordingly, it may be hoped that similar exemption is provided to service tax assessees based on the quantum of service tax paid in a financial year. However, as the small scale exemption limit in excise is much higher than that prevalent in service tax, there is possibility that the limit of service tax payment may be specified on lower side.
·        The last date for filing of annual return is 30th November of the succeeding financial year with the option to revise the return within one month from the date of filing of original return. The provision enabling revision of return is welcomed.
·        Late filing of annual return will invite late fees at the rate of Rs. 100/- per day during the period of delay subject to maximum of Rs. 20,000/-
Before Parting:-
Although, the requirement of Annual Return is akin to the ER-4 return to be filed by Central Excise assessees, but there will be substantial difference in the details to be submitted in the annual return filed by the service tax assessees. Moreover, in service tax laws, not only service providers but service receivers are also liable to pay service tax under special circumstances which is commonly known as ‘reverse charge mechanism’ or ‘partial charge mechanism’. Consequently, the assessees paying service tax under ‘reverse charge mechanism’ should be exempted from filing Annual Returns as the return would normally require assessees to provide information as regards income/expenditure incurred by them. 

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