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Thread: 015 - Service Tax - Circulars - Year 2008 - F.No.137/26/2007-CX.4 - dated - 01-01-2008 - Maintenance and furnishing of records in service tax - reg.

  1. #21
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    Thumbs up Service Tax - Circulars - Year 2008 - Circular No.-102 /5/2008-ST,dated -04-06-2008 - Guidelines in respect of the Dispute Resolution Scheme, 2008-reg

    Service Tax


    Circular/Instructions/Trade Notices

    Guidelines in respect of the Dispute Resolution Scheme, 2008-reg.


    Circular No.-102 /5/2008-ST

    F. No. 137/96/2008-CX.4

    Government of India

    Ministry of Finance

    Department of Revenue

    Central Board of Excise & Customs

    New Delhi dated the June 4th, 2008

    To,
    Chief Commissioners of Central Excise & Customs (All)
    Chief Commissioners of Central Excise (All)
    Director General of Service Tax
    Director General of Central Excise Intelligence
    Commissioners of Service Tax (All) Commissioner (DPPR)

    Sir/Madam,

    Sub: Guidelines in respect of the Dispute Resolution Scheme, 2008-reg.

    The Dispute Resolution Scheme, 2008 has been notified vide Chapter VI of the Finance Act, 1994. This compounding scheme has been notified as a one time measure for quick resolution of disputes.
    (a) involving small service tax amounts upto Rs 25000; and
    (b) involving non-recovery of penalty or interest. However, cases involving non-payment of service tax after having collected the same from client/customer are not included in the Scheme.

    2. Salient feature of the Scheme: The salient features of this Scheme are as follows:

    (i) The Scheme covers all such cases where tax arrears, including interest and penalty, were payable or leviable under the Finance Act, 1994, but not paid prior to 1.3.2008 and where a Show Cause Notice/order has been issued on or before 1.3.2008.
    (ii) This Scheme would be in operation from 1.7.2008 to 30.9.2008. The benefit, concession or immunity under the Scheme would only be available in respect of the case in respect of which declaration is made under the Scheme within this period;
    (iii) The Scheme shall not apply to
    (a) any show cause notice or order issued under section 73A of the Finance Act, 1994, i.e., cases involving non-payment of service tax after having collected the same from client/customer; and
    (b) any case where tax arrears includes service tax amount of more than Rs 25,000;
    (iv) The order passed under the Scheme would be conclusive and would not be subjected to any appeal. Any pending appeal in the matter shall stand withdrawn. In such cases where the declarant has pursued a petition in a court of law, he shall withdraw such petition for availing benefit of this Scheme in respect of such matter;
    (v) The amount paid under the Scheme would not be refundable under any circumstances;
    (vi) The Central Government shall have power to make rules to implement this Scheme as well as for removal of difficulties for implementation of this Scheme.

    3. Procedure to be followed: The Dispute Resolution Scheme Rules, 2008 have been issued vide notification No. 28/2008-ST, dated 4.6.2008. These rules prescribe the manner of declaration to be made under the Scheme by the person (declarant) opting for it. These rules read with the provisions of Chapter VI of the Finance Act, 2008, provide the procedure to be followed for operating the Scheme, which is as follows:

    (1) The Commissioner of Central Excise shall, for the purposes of this Scheme notify, by way of an officer order, an officer not below the rank of Assistant Commissioner of Central Excise as the designated officer.
    (2) The declarant, opting for the Scheme, shall make a declaration before the designated officer in Form 1 (as prescribed under rule 3 of the aforesaid Rules).
    (3) The designated officer shall get the declaration verified. Upon verification of declaration, the designated officer shall, within fifteen days, issue an order (as prescribed under section 96 (1) of Chapter VI of the Finance Act, 2008), indicating the amount to be paid by the declarant for resolution of dispute under the Scheme. The manner of calculation of tax arrears and the amount payable under the Scheme has been discussed in the subsequent paragraph along with illustrations. The format for issuance of order under section 96 (1) is annexed herewith to ensure uniform practice. Accordingly, the designated officer shall issue the order in the specified format.
    (4) The declarant shall, within thirty days pay the sum determined by the designated authority, vide order as mentioned above, and intimate the fact of such payment along with an evidence of payment of amount. In addition, the declarant shall also produce the evidence of withdrawal of case pending, if any, in a High Court or the Supreme Court, in the matter being resolved under the Scheme.
    (5) On receipt of information regarding payment of sum determined by the designated authority and evidence of withdrawal of case pending in the matter, if any, before a High Court or the Supreme Court, the designated authority shall issue a certificate in Form 2 (as prescribed under rule 5 of the aforesaid Rules), certifying full and final settlement of tax arrears in the case in respect of which declarant had opted for this Scheme.

    4. Compounding amount: The compounding amount under the Scheme is as follows:

    (i) In a case where a pending SCN involves a service tax amount upto Rs 25000/-, with penalty or interest relating there to, amnesty under the Scheme would be available on payment of an amount equal to 50% of the service tax amount involved in the SCN. The penalty and interest would stand waived.
    (ii) Similarly, in the case of a confirmed demand, where service tax arrears amount as on 1.3.2008 is upto Rs 25,000, with unpaid interest or penalty relating there to, amnesty under the Scheme would be available on payment of an amount equal to 50% of the service tax arrears. The penalty and interest would stand waived.
    (iii) In a case where an SCN is pending only for imposition of both, penalty and interest, amnesty under the Scheme would be available on payment of 25 % of the interest payable plus 25% of the 'maximum' prescribed penalty leviable. If maximum penalty leviable exceeds the service tax amount, the penalty amount would be taken as equal to service tax amount for computation of compounding amount under the Scheme. Thus, in such case the compounding amount would be 25% of interest payable plus 25% of the penalty involved (taken as equal to service tax amount, if penalty exceeds service tax amount) in the offence.
    (iv) In a case where a confirmed demand involving only interest or penalty, amnesty would be available on payment of 25% of the unpaid amounts towards interest or penalty. In such cases too, if the penalty imposed is more than the service tax involved, for the purposes of the scheme, the penalty would be taken to be equal to tax amount.

    4.1.Illustrations as regards manner of computation of amount payable: A few illustrations showing the manner of computation of amount payable under the Scheme are given below:

    A. Cases where Show Cause Notice has been issued but not adjudicated:

    Illustration 1:

    The show cause notice involves :
    (i) a demand of service tax of Rs 20,000;
    (ii) interest at the applicable rate; and
    (iii) penalty as applicable under various sections of the Finance Act. The service tax amount has not been paid on the date of declaration under the Scheme:
    The tax arrears as per section 94 (b) of the Finance Act, 1994:
    (i) Service tax: Rs 20,000
    (ii) Education cess: as applicable (as mentioned in the show cause notice)
    (iii) Interest: as applicable (as mentioned in the show cause notice)=I
    (iv) Penalty: not decided
    The compounding amount shall be @ 50% of service tax amount plus education cess payable thereon= Rs 10,000 plus education cess on Rs 10,000. Penalty and interest shall be waived off.

    Illustration 2:

    The assessee has already paid the service tax amount of Rs 20,000 along with education cess. However, a show cause notice has been issued demanding
    (i) interest at the applicable rate; and
    (ii) penalty as applicable under various sections of the Finance Act, 1994.
    The tax arrears as per section 94 (b) of the Finance Act, 1994:
    (i) Service tax: Nil
    (ii) Education cess: Nil
    (iii) Interest: as applicable (as mentioned in the show cause notice)= say Rs 5000
    (iv) Penalty: not decided. However, for the purposes of this Scheme, the maximum penalty that is leviable as per the show cause notice will be taken as tax arrear subject to the condition that in case the penalty leviable exceeds the service tax amount involved, the maximum penalty leviable shall be taken as equal to service tax. Therefore,
    (a) suppose the maximum penalty leviable is twice the service tax amount i.e., Rs 40,000. The penalty amount shall be taken as Rs 20,000.
    The compounding amount shall be @ 25% of Interest +25% of penalty
    = 0.25X5000 + 0.25X 20000 =1250+5000=Rs 6,250.
    (b) Suppose the maximum penalty leviable is Rs 5000 ( which is less than the service tax amount). The penalty amount shall be taken as Rs 5000
    The compounding amount shall be @ 25% of Interest +25% of penalty
    = 0.25X5000 + 0.25X 5000 =1250 +1250=Rs 5,000.

    B. Cases where an order has been passed, including the cases where orders have been passed in appeal

    Illustration 3:

    The order confirms
    (i) a demand of service tax of Rs 25,000;
    (ii) interest at the applicable rate; and
    (iii) penalties of Rs 10000. The service tax amount, interest and penalties have not been paid on the date of declaration under the Scheme:
    The tax arrears as per section 94 (b) of the Finance Act, 1994:
    (i) Service tax: Rs 25,000
    (ii) Education cess: as applicable
    (iii) Interest: as applicable = say Rs 2000
    (iv) Penalty: Rs 10000
    The compounding amount shall be @ 50% of service tax amount plus education cess payable thereon
    = Rs 12,500 plus education cess on Rs 12,500.
    Penalty and interest shall be waived off.

    Illustration 4:

    In the above illustration (illustration 3), the assessee has paid the service tax amount of Rs 25,000 along with education cess. However,
    (i) interest at the applicable rate; and
    (ii) penalties have not been paid.
    The tax arrears as per section 94 (b) of the Finance Act, 1994:
    (i) Service tax: Nil
    (ii) Education cess: Nil
    (iii) Interest: as applicable (as mentioned in the show cause notice)= say Rs 5000
    (iv) Penalty: Rs 10000.
    The compounding amount shall be @ 25% of Interest +25% of penalty
    = 0.25X5000 + 0.25X 10000 =1250 +2500=Rs 3,750.

    Illustration 5:

    The assessee has paid the service tax of Rs 25,000 along with education cess. However, interest and penalties as imposed by an order has not been paid. As per the order interest liability is Rs 10,000 and the penalties imposed are Rs 30,000. The order confirms (i) a demand of service tax of Rs 25,000; (ii) interest at the applicable rate; and (iii) penalties of Rs 30,000. The interest and penalties have not been paid on the date of declaration under the Scheme:
    The tax arrears as per section 94 (b) of the Finance Act, 1994:
    (i) Service tax: Nil
    (ii) Education cess: Nil
    (iii) Interest =Rs 10,000
    (iv) Penalty: Rs 25,000 (Note: as the penalty imposed is more than the service tax amount involved in the case, the penalty amount shall be taken as equal to the service tax amount)
    The compounding amount shall be @ 25% of Interest +25% of penalty
    = 0.25X10,000 + 0.25X 25000 =2500+6250= Rs 8750

    Illustration 6:

    The order only involves only a demand of interest of say Rs 100,000; and (iii) penalties of Rs 50,000. Service tax and cesses have already been paid.
    The tax arrears as per section 94 (b) of the Finance Act, 1994:
    (i) Service tax: Nil
    (ii) Education cess: Nil
    (iii) Interest =Rs 100,000
    (iv) Penalty: Rs 50,000
    The compounding amount shall be @ 25% of Interest +25% of penalty
    = 0.25X100,000 + 0.25X 50000 =Rs 25,000+Rs 12,500=Rs 37,500
    5. As stated above, the Dispute Resolution Scheme Rules, 2008 have been issued vide notification No. 28/2008-ST, dated 4.6.2008.
    6. The Commissioner of Central Excise and Service shall notify well in advance, by way of an office order, the designated officer in respect of their jurisdiction.
    7. This Scheme envisages culmination of pending litigation by quick resolution of pending disputes which fall within the specified Wide publicity may be given, in the form of trade notices, advertisements, seminars and interaction with the trade associations to make the stakeholders aware of the Scheme. Any difficulty faced in implementing the above provisions may be immediately brought to the notice of the undersigned.
    8. Receipt of the Circular may be acknowledged.
    9. Hindi version will follow.

    Yours faithfully,
    (Gautam Bhattacharya)
    Commissioner (ST)

    Encl: As above


    Annexure (Circular No. 102/5/2008-ST)

    ORDER
    ISSUED UNDER SECTION 96(1) OF THE FINANCE ACT, 2008, IN RESPECT OF THE DISPUTE RESOLUTION SCHEME, 2008

    Whereas Mr./Mrs./M/s. ........................................................... (hereinafter referred to as the declarant) has filed a declaration under section 94 of the Finance Act, 2008;
    And whereas the said declaration has been received on ___________ in the office of the designated authority.
    Now, therefore, in exercise of the powers conferred by sub-section (1) of section 96 of the Finance Act, 2008, the designated authority after considering relevant material, hereby determines the following amount payable by the declarant towards the full and final settlement of his/her/their tax arrears covered by the said declaration under the Scheme.
    Tax arrears
    Amount of tax arrears declared in Form 1 (as prescribed vide the Dispute Resolution Scheme Rules, 2008) (In Rs.)
    Amount determined as payable under section 96(1) of the Finance Act, 2008 (In Rs.)

    Remarks
    (a) Taxes
    (b) Education cess (Primary)
    (c) Secondary and higher education cess
    (d) Interest
    (e) Penalty




    The declarant is hereby directed to make payment of the sum payable within thirty days from the date of this certificate.

    Place :
    Date : Name, signature and seal of the Designated Authority



  2. #22
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    Thumbs up Service Tax - Circulars - Year 2008 -Trade Notice No. - 5/2008, dated 19-6-2008 - Head of Accounts for 6 new Services brought under Service Tax

    Service Tax


    Circular/Instructions/Trade Notices

    Head of Accounts for 6 new Services brought under Service Tax net w.e.f 16-5-2008


    Coord/13-6/H/A/cs/Vol.VII/42


    Office of the
    Pr. Chief Controller of Accounts

    Central Board of Excise & Customs

    A.G.C.R.Building, 1st Floor,

    I.P. Estate, New Delhi.

    Dated 9-6-2008

    OFFICE MEMORANDUM

    Subject : Head of Accounts for 6 new Services brought under Service Tax net w.e.f 16-5-2008

    I am to state that 6 new services have been brought into the Service Tax net in the Finance Bill, 2008. The new services have been notified to be effective from 16-5-2008 vide Notification No. 18/2008-Service Tax, dated 10-5-2008. List of Head of Accounts opened under the Major Head "0044-Service Tax" in respect of the new services is enclosed herewith. The computer Codes i.e. SCCD Codes and Srl. Codes have also been allotted by CGA's Office and the same have been mentioned against the relevant head of Account in the list.

    Eight digit reduced accounting codes as mentioned at column No. 3 in the list may please be intimated to the Commissioner, Customs, Central Excise & Service Tax under your accounting jurisdiction with the advice to issue a Trade Notice for information of the assessee.

    Yours faithfully
    (A.K. Singh)
    Dy. Controller of Accounts

    New Head of Accounts to be opened below Major Head 044 - Service Tax

    Head of Accounts
    Description
    Serial Code
    SCCD Code
    004400205

    00440020501
    00440020502
    00440020503
    Minor Head - Services provided by any person in relation to information technology software for use in the course, or furtherance, of business or commerce.
    Sub-head - Tax Collection
    Sub-head - Other Receipt
    Sub-head - Deduct Refunds
    00440449

    00440452
    00440450
    00440451
    111

    111
    113
    118
    004400206


    00440020601
    00440020602
    00440020603
    Minor Head - Services provided by an insurer on life insurance business, in relation to management of investment, under unit linked insurance business, commonly known as Unit Linked Insurance Plan (ULIP) scheme
    Sub-head - Tax Collection
    Sub-head - Other Receipt
    Sub-head - Deduct Refunds
    00440429


    00440430
    00440431
    00440432
    113


    111
    110
    119
    004400207


    00440020701
    00440020702
    00440020703
    Minor Head - Services provided by a recognized stock exchange in relation to assisting, regulating or controlling the business of buying, selling or dealing in securities and includes services provided in relation to trading, processing, clearing and settlement of transactions in securities.
    Sub-head - Tax Collection
    Sub-head - Other Receipt
    Sub-head - Deduct Refunds
    00440433


    00440434
    00440435
    00440436
    112


    117
    114
    115
    004400208


    00440020801
    00440020802
    00440020803
    Minor Head - Services provided by a recognized/registered association in relation to assisting, regulating or controlling the business of the sale or purchase of any goods or onward contracts and includes services provided in relation to trading, processing, clearing and settlement of transactions in goods or forward contracts.
    Sub-head - Tax Collection
    Sub-head - Other Receipt
    Sub-head - Deduct Refunds
    00440437


    00440438
    00440439
    00440440
    116


    113
    118
    118
    004400209


    00440020901
    00440020902
    00440020903
    Minor Head - Services provided by a processing and clearing house in relation to processing, clearing and settlement of transactions in securities, goods or forward contracts including any other matter incidental to, or connected with, such securities, goods and forwar contracts.
    Sub-head - Tax Collection
    Sub-head - Other Receipt
    Sub-head - Deduct Refunds
    00440441


    00440442
    00440443
    00440446
    113


    116
    115
    112
    004400210


    00440021001
    00440021002
    00440021003
    Minor Head - Services provided by any person in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring right of procession and effective control of such machinery, equipment and appliances.
    Sub-head - Tax Collection
    Sub-head - Other Receipt
    Sub-head - Deduct Refunds
    00440444


    00440445
    00440447
    00440448
    114


    117
    119
    110

    Note - A : * The Sub-head "Other Receipt" is meant for interest, penalty leviable on delayed payment of Service Tax.

    * * The Sub-head "Deduct Refunds" is not to be used by the assessees, it is meant for the department while allowing refund of Tax.

    B : Primary Education Cess on all taxable services will be booked under 00440298 and Secondary and Higher Education Cess will be booked under 00440426.

    [Source Commissioner of Central Excise & Service Tax, Salem, Service Tax Trade Notice No. 5/2008, dated 19-6-2008]



  3. #23
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    Thumbs up Service Tax -Circulars - Year 2008 - F No 345/6/2008-TRU -dated -11-06-2008 -Service Tax on pre-closure under banking and other financial Services-reg

    Service Tax


    Circular/Instructions/Trade Notices
    Service Tax on pre-closure under banking and other financial Services - regarding


    F No. 345/6/2008-TRU

    Government of India

    Ministry of Finance

    Department of Revenue

    (Tax Research Unit)
    Dated: June 11, 2008

    Subject: Service Tax on pre-closure under banking and other financial Services - regarding

    Commissioner (Service Tax), Chennai has brought to the notice of the Board that divergent practices are being followed in respect of levy of service tax on services provided by banks and other financial institutions on the amount collected as pre-closure / fore-closure charges in relation to lending.

    2. Services provided by a banking company or a financial institution or any other body corporate or any commercial concern in relation to banking or other financial services is leviable to service tax under Section 65(105)(zm) of Finance Act, 1994. 'Banking and other financial services' defined under Section 65(12) include lending. Any amount collected by the service provider on account of lending is either interest or service charges. Pre-closure / fore-closure charges are not charges collected for delayed payment. These charges not being 'interest' are to be appropriately treated as consideration for the services provided and accordingly leviable to service tax under Section 65(105)(zm).

    3. Field formation may be advised to take appropriate action. This is issued with the approval of Member (Budget).

    Unmesh Wagh
    Under Secretary (TRU)


  4. #24
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    Thumbs up Service Tax - Circulars -Year 2008 - Dy.No.170/Com(ST)/08 -dated -12-06-2008 - Scrutiny of service tax returns - reg

    Service Tax


    Circular/Instructions/Trade Notices

    Scrutiny of service tax returns - reg

    Dy.No.170/Com(ST)/08

    Government of India

    Ministry of Finance

    Department of Revenue

    Central Board of Excise & Customs (Service Tax) New Delhi

    Dated : June 12, 2008

    Subject: Scrutiny of service tax returns - reg.

    It may be recalled that Board vide letter F.No.137/27/2007-CX.4 dated 8.2.2007 had circulated the frequency and the norms for undertaking scrutiny of the returns filed, especially by the large service taxpayers. The said letter prescribed the basic checks (such as checking of filing or non-filing of returns, late filing, arithmetical inaccuracies, verification of tax payment) that were to be conducted to verify the level of tax-compliances. The checks prescribed are such that they can be done by the officers based on the return data itself, without informing the taxpayer. Only in case of detection of short-payment of tax, data error, arithmetical inaccuracies, the taxpayer need be contacted.

    2. At the recent conference of the Chief Commissioners and Directors General, it was noted that there are reports that in many cases the service tax officers/formations are contacting taxpayers, soon after filing of the return (and without detecting any short/non-payment of tax or error) and conveying the message that though the return has been received, it would be accepted subject to detailed scrutiny. Such an action on the part of the officers is likely to give an impression to the taxpayer, that he is required to visit the service tax officer for getting his return scrutiny completed, even though there is no error in the return or short-payment of tax on part of the taxpayer.

    3. In view of the foregoing, the undersigned is directed to inform you that strict instructions may be issued to the filed officers not to resort to such practices. Only in the event of detection of a short-levy non-levy of service tax or arithmetical errors or errors in filing up the return form, the taxpayer should be contacted by an officer not below the rank of a superintendent of Central Excise and record of such communication may be maintained by the officer. Such record should be periodically reviewed by the senior officers. Any deviation from this practice would be viewed seriously.

    4. This issue with the approval of the Chairman (CBEC).

    Yours faithfully,
    (Gautham Bhattachary

  5. #25
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    Thumbs up Service Tax - Circulars -Year 2008 - letter F. No.-137/120/2008-CX.4 dated 24-6-2008 - Cenvat credit of CVD on imported goods

    Service Tax


    Circular/Instructions/Trade Notices

    letter F. No.-137/120/2008-CX.4 dated 24-6-2008)

    [Commissioner of Central Excise, Madurai, Trade Notice No. 42/2000 (Service
    Tax No. 15/2008), dated 11-9-2008]

    Cenvat credit of CVD on imported goods Utilisation towards payment of Service tax

    M/s. Hindustan Construction Company Limited (HCCL) imported an aircraft last year, which was cleared on payment of appropriate Customs duty (i.e., CVD). After its import, the aircraft was being let out by HCCL on hire basis without transferring right of possession and effective control. From 16-5-2008, 'supply of tangible goods for use, without transferring right of possession and effective control' was brought under taxable service. After 16-5-2008, such activity attracts service tax on the hire charges received by HCCL. In this regard, it has been requested that HCCL should be allowed to take credit of the CVD paid on the aircraft and utilize it for paying service tax. The modality suggested is to amend the Cenvat Credit Rules, 2004 so as to specifically include aircraft within the definition of capital goods, as has been done in case of motor vehicles for providing specified services.

    2. The matter has been examined. It is noticed that in this specific case, the aircraft was imported last year and till 15-5-2008, the service provided by HCCL was outside the scope of the Section 66 of the Finance Act and thus was covered under the definition of the term "exempted services" under the Cenvat Credit Rules, 2004. As per Rule 6(4), no Cenvat Credit can be taken on capital goods, which are used in providing only exempted services. Therefore, ab initio, HCCL was not eligible to take credit of CVD. Such being the case, the credit which was ab initio ineligible, does not become eligible, after the service tax is imposed on the service at a later date. It is therefore clarified that no Cenvat credit of the CVD paid on the said aircraft should be taken, even if it is specifically included within the definition of 'capital goods'.

    3. This may be brought to the notice of all constituent members of your trade associations.



  6. #26
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    Thumbs up Service Tax - Circulars - Year 2008 - ORDER NO 01/2008-ST -dated - 25-06-2008 - Closure of cases under Section 73(3) of the Finance Act of 1994 - Reg.

    Service Tax


    Circular/Instructions/Trade Notices

    Closure of cases under Section 73(3) of the Finance Act of 1994 - Reg.
    OFFICE OF THE COMMISSIONER OF CUSTOMS & CENTRAL EXCISE

    HYDERABAD-III COMMISSIONERATE

    GENERAL INSTRUCTION


    STANDING ORDER NO 01/2008-ST

    Dated: June 25, 2008

    Sub: Closure of cases under Section 73(3) of the Finance Act of 1994 - Reg.
    It has been noticed that different practices for closure of cases covered under Section 73(3) of the Finance Act, 1994 are being followed in the Commissionerate. There is neither any separate record prescribed nor is there any standard procedure for dealing with such cases.

    2. Closure of cases under Section 73(3) of the Act is akin to exercising quasi judicial function in as much as the competent authority has to decide about absence of evidence or grounds for invocation of proviso to section 73 and apply Section 73(3) of the Act. It is thus administrative propriety that closure of cases of cases under Section 73(3) of the Act should be carried out with the approval of the Commissioner who is the reviewing authority for the lower adjudicating authorities. If the case arises out of Audit objection then the closure will be approved in the Monthly Monitoring Committee (MMC) meeting chaired by the Commissioner, Anti-Evasion and Divisional cases will be put up to the Commissioner through the Additional Commissioner (Anti-Evasion).

    3. Needless to mention that in all such cases full recovery of Service Tax with interest alongwith request for waiver of Show Cause Notice are necessary before closure of the case under Section 73(3) of the Act can be considered. Format for the letter to be obtained from the assessees is in the Annexure (enclosed). It is also imperative that the investigating officers should clearly certify that no evidence leading to invocation of the grounds for extended period as envisaged in the proviso to Section 73 are involved in the cases considered for closure under Section 73(3) of the Act.

    4. After the approval of the competent authority, details of these cases must be entered in a separate register in the Division/ Hqrs. Audit/Hqrs. Anti-Evasion branches in the following format:

    Sr. No.
    Name of the Assessee
    Division/Hqrs. Anti-Evasion/Audit
    335J entry No./Audit Note No. as the case may be
    Service tax recovered
    Interest recovered
    Issue involved
    Closed by whom with date
    Remarks
    (1)
    (2)
    (3)
    (4)
    (5)
    (6)
    (7)
    (8)
    (9)


    A monthly report in this regard in the format mentioned above should be furnished by all the Divisions/ Hqrs. Audit Branch/Hqrs. Audit/ Hqrs. Anti-Evasion Branch of the Commissionerate by 5 th of the following month to the Commissioner (to be processed in Hqrs. Service Tax (Tech) Section.)

    (B.B. Prasad)
    Commissioner

    ANNEXURE TO STANDING ORDER No.01/2008-SERVICE TAX

    Dated:June, 2008
    Sub: Letter given under Section 73(3) of the Finance Act, 1994 for avoiding penalty and non-issuance of SCN-Reg.


    I/We M/s. ______________________________________________ falling under the jurisdiction of ______________________________________________Ranger and ________________________________________ Division state and request as under:

    2. Whereas in terms of Section 73(3) of the Act, where any Service Tax has not been levied or paid or has been short levied or short paid or erroneously refunded, the person, chargeable with Service Tax, may pay the amount of Service Tax before service of notice on him under sub-section(1) in respect of Service Tax and inform the Central Excise officer in writing who, on receipt of such information shall not serve any notice under the sub-section(1) in respect of the Service Tax so paid;

    3. Whereas during the course of verification of our records returns, by the Range/Division/Audit/Anti-Evasion of the Headquarters office of HYDERABAD-III Commissionerate, it is observed that there is short payment/ non-levy/ non-payment of Service Tax / Wrong availment of Cenvat Credit an account of issue/issues mentioned as per the Annexure. We having agreed to the points raised during verification/ scrutiny have paid the said amounts of Service Tax/ reversed the Cenvat Credit of Rs.________________ vide TR-6/Cenvat Register No._________dated___________along with the interest of Rs.____________vide TR-6 Cenvat Register No._____________ dated __________voluntarily.

    4. Now, therefore, in terms of the provisions of Section 73(3) of the Finance Act, 1994, we requests that a SCN may not be issued to us in this case and no penalty may be imposed on us as the above short levy/ short payment /non-levy/non-payment/wrong availment of credit are not intentional on our part. We request that the above issue may be treated as closed with this letter since we have complied with the above provisions of Service Tax Law. We do not intend to file any appeal in the matter. We will also not be claiming refund of Service Tax paid as mentioned in the preceding paragraph.

    Yours faithfully
    (Authorised Signatory)
    Mrs._____________________
    Date:
    Place:


  7. #27
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    Thumbs up Service Tax -Circulars - Year 2008 -F.No. 345/1/2008-TRU - dated -27-06-2008 - Charge of Service tax on services received from outside India

    Service Tax


    Circular/Instructions/Trade Notices

    Charge of Service tax on services received from outside India under Section 66 A of the Finance Act, 1994 and admissibility, or otherwise, of CENVAT credit thereof under CENVAT Credit Rules, 2004 - Regarding


    F.No.- 345/1/2008-TRU


    Government of India

    Ministry of Finance

    Department of Revenue

    Tax Research Unit


    Room No. 146 G, North Block, New Delhi

    Dated : June 27, 2008

    Subject : Charge of Service tax on services received from outside India under Section 66 A of the Finance Act, 1994 and admissibility, or otherwise, of CENVAT credit thereof under CENVAT Credit Rules, 2004 - Regarding.

    Board vide para 4.2.13 of letter F.No B1/4/2006 dated 19.4.06 clarified the admissibility of CENVAT credit of service tax paid under Section 66A on the taxable services provided from outside India and received in India and used as input services for the taxable outputs, as follows:

    "4.2.13 The treatment of the recipient of service, as the deemed service provider under Section 66A is only for the purpose of charging service tax on taxable services received from outside the country. Services provided from outside India and received in India , therefore, not treated as taxable service provided by the recipient for the purpose of CENVAT Credit Rules, 2004, However, where such service is used as an input for providing any taxable output, the service tax paid on such service can be taken as input credit."

    2. It has been brought to the notice of the Board by trade and industry associations that a view contrary to the said explanation has been expressed by field formations in certain cases.

    3. Section 66 is the charging section and provides for levy of service tax on taxable services referred to in sub-clauses of clause (105) of section 65. Services specified in clause (105) of section 65, provided by a person located in a country other than India and received by a person located in India, is treated as per Section 66A, as taxable services for the purpose of levy of service tax in India as if the recipient of the service had himself provided the said services in India extends all the provisions of Chapter V of the Finance Act 1994 on such services provided from a country other than India and received in India; and the recipient of such taxable service is required to be registered as a person liable to pay service tax.

    4. The recipient of the service is required to pay service tax under Section 66A though the service is actually provided not by the recipient but by a person located in a country other than India . Such taxable services, not being actually provided by the person liable to pay service tax, are not treated as "output services" for the purpose of CENVAT Credit Rules, 2004. However, service tax paid under Section 66A is available as "input credit" under CENVAT Credit Rules, 2004 provided the said services are used as input services by the manufacturer or producer of final products or a provider of output taxable service.

    5. The views communicated by the Board in para 4.2.13. of F.No B1/4/2006-TRU dated 19 th April, 2006 are reiterated,

    6. Trade and field formations may be informed accordingly

    (G.G.Pai)
    Under Secretary (TRU)


  8. #28
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    Thumbs up Service Tax - Circulars -Year 2008 - F. NO. 275/73/2007IT(B) - dated - 30-06-2008 - Deduction of Tax at Source (TDS) on Service Tax

    Service Tax


    Circular/Instructions/Trade Notices

    Deduction of Tax at Source (TDS) on Service Tax


    CIRCULAR F. NO.- 275/73/2007IT(B),

    DATED 30-6-2008

    Kindly refer to your letter No. Dir. Tax/761, dated 5-5-2008 on the subject mentioned above. Your request has been considered by the Board. The payments made under Section 194-I differ significantly from payment made under Section 194-J in the way that in the case of 194-I TDS has to be deducted on any income paid as rent. However, in the case of Section 194-J has to be deducted on any sum paid as professional and technical fees. The board had decided to exclude TDS on service tax component on rents payment because it was construed that service tax payment cannot be regarded as income of the landlord. Since Section 194-J covers any sum paid, therefore the board has decided not to extend the scope of Circular No. 4/2008, dated 28-4-2008 to such payment under Section 194-J.



  9. #29
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    Thumbs up Service Tax - Circulars - Year 2008 - Circular No. 103/ 06 /2008-ST,dated - 01-07-2008 - Instructions regarding provisional attachment of property

    Service Tax


    Circular/Instructions/Trade Notices

    Instructions regarding provisional attachment of property under section 73 C of the Finance Act, 1994-reg.

    Circular No. 103/ 06 /2008-ST

    F.No. 137/120/2006-CX4

    Government of India

    Ministry of Finance

    Department of Revenue


    Central Board of Excise & Customs



    ***
    New Delhi, dated the 1st July, 2008

    To
    Chief Commissioners of Central Excise & Customs (All)
    Chief Commissioners of Central Excise (All)
    Director General of Service Tax
    Director General of Central Excise Intelligence
    Commissioners of Service Tax (All)
    Commissioner (DPPR)
    webmaster@cbec.gov.in

    Sir/Madam,

    Subject: - Instructions regarding provisional attachment of property under section 73 C of the Finance Act, 1994-reg.

    Section 73C of the Finance Act, 1994 (hereinafter referred to as the Act) provides for provisional attachment of property for the purposes of protecting the interests of revenue during the pendency of any proceedings under section 73 or section 73A of the Act.

    2. In this connection the following guidelines are issued to maintain uniformity in its implementation by field formations.

    (i) The proceedings for provisional attachment can be initiated only after issue of Show Cause Notice under section 73 or section 73A of the Act.
    (ii) During the pendency of the proceedings under section 73 or 73A of the Act, if the Central Excise Officer is of the opinion that, in order to protect the interests of revenue, it is necessary to attach the property of the noticee, he shall prepare a proposal in the format prescribed under the sub-rule(1) of rule 3 of the Service Tax (Provisional Attachment of Property) Rules, 2008, issued vide notification No. 30/2008-ST, dated the 1st July, 2008, and forward the same to the jurisdictional Commissioner of Central Excise for his approval, except in cases where the proceedings under section 73 or section 73A of the Act are pending before such Commissioner of Central Excise, in which case he shall himself make the order of attachment, in accordance with the procedure set out in para (iv) below.
    (iii) It is important to note that there should be sufficient justification to hold a view that the provisional attachment of property is necessary to protect the interests of revenue. The remedy of attachment being, by its very nature, extraordinary, has to be resorted to in the utmost circumspection and with maximum care and caution. The grounds on which the Central Excise Officer entertains the reasonable belief that the notice would dispose of, or remove, the property and the sources of his information, if any, should be clearly stated while seeking the approval of the Commissioner of Central Excise. Normally, the proposal should be forwarded within one month's period of the issue of show cause notice. It may also be noted that appropriate disciplinary action shall be initiated against the officers who may be found to exercise the powers of provisional attachment of property frivolously and without sound reasons. [Recommendation of the Standing Committee on Finance (Fourteenth Lok Sabha) in its 27th Report.]
    (iv) The Commissioner of Central Excise, on receipt of proposal, or on his own, if he is satisfied that circumstances of the case justify provisional attachment, may serve a notice on the person on whom a notice is served under Section 73 or 73A of the Act, requiring such person to make submissions, in writing or in person or both, within fifteen days of serving of the notice as to why the property belonging to such person, and as may be specified in the notice, be not provisionally attached. The said notice should also specify the condition that the noticee should not sell, transfer, mortgage, charge, lease or otherwise alienate or encumber the property specified in the notice, till the decision of the said notice. In case of proposal for provisional attachment of immovable property, the notice should also be sent to the concerned registration authorities with a direction not to allow any sale, transfer, mortgage etc., of the property.
    (v) After due consideration of the materials before him, and after hearing the person, if such person so desires, the Commissioner of Central Excise may grant approval to the provisional attachment of the property and the Central Excise Officer before whom the proceedings under Section 73 or 73A of the Act are pending, may, by order in writing, attach the said property. The Commissioner shall grant such approval, or, where proceedings under section 73 or 73 A of the Act are pending before him, order the attachment of the property, within fifteen days of holding of personal hearing. A copy of the order of provisional attachment should be served by the Central Excise Officer in the same manner as prescribed under section 37 C of the Central Excise Act, 1944, as made applicable to service tax vide section 83 of the Act.

    (vi) The following types of offences committed by a service provider on an exporter may be considered for provisional attachment of property:-
    (a) Provision of a taxable service without the cover of an invoice or any other document, as prescribed, and without payment of tax;
    (b) Provision of a taxable service without declaring the correct value for payment of service tax, where a portion of value of taxable service, in excess of invoice price, is received by him or on his behalf but not accounted for in the books of account.

    (c) Taking of CENVAT credit without the receipt of goods or services specified in the document based on which the said credit has been taken;
    (d) Taking of CENVAT credit on invoices or other documents which a person has reasons to believe as not genuine;
    (e) Issue of service tax invoice or any other document, without providing or to be providing a taxable service, as specified in the said invoice or other document;
    (f) Claiming of refund or rebate in a fraudulent manner such as on invoice or other documents which a person has reason to believe as not genuine.
    (vii) The provisional attachment of property shall be resorted only in a case where the service tax or CENVAT credit alleged to be involved is more than Rs. 25 lakh (twenty five lakh).
    (viii) Period of Attachment :
    (a) The order of provisional attachment of property shall be operational only for a period of six months from the date on which the order is served on the noticee. However, the Chief Commissioner of Central Excise may, for reasons to be recorded in writing, extend the aforesaid period by such further period or periods as he thinks fit, but the total period of extension shall not, in any case, exceed two years.
    (b) The order of provisional attachment shall cease to have effect if the noticee pays the entire duty amount along with interest.
    (ix) Types of property which can be attached :
    (a) Personal property of a sole proprietor or partners shall not be attached. Personal property means any movable or immovable property which is in personal use of the sole proprietor or partner. However, immovable property/ properties which is/ are used for commercial purpose may be provisionally attached.
    (b) Movable property should be attached only if the immovable property available for attachment is not sufficient to protect the intersts of revenue.
    It should also be ensured that such attachment does not hamper normal business of the assessees. This would mean that inputs required for provision of a service should not be attached by the department.
    (x) Attachment not to be excessive: Provisional attachment by arrest or distrain of the property shall not be excessive, that is to say, the property provisionally attached shall be of value as nearly as may be equivalent to that of the amount demanded in the proceedings under section 73 or section 73A of the Act.
    (xi) Attachment between Sunrise and Sunset: The provisional attachment of the property of the concerned person by arrest or distrain shall be made after sunrise and before sunset and not otherwise.
    (xii) Inventory: After provisional attachment of the property, the Central Excise Officer shall prepare an inventory of the property attached and specify in it the place where it is lodged or kept and shall hand over a copy of the same to defaulter or the person from whose charge the property is distrained.
    (xiii) Private alienation to be void in certain cases:
    (a) where a notice has been served on a person for provisional attachment, the person on whom such notice has been served or his representative in interest shall not be competent to mortgage, charge, lease or otherwise deal with any property belonging to him except with the written permission of the Commissioner of Central Excise.
    (b) Where a provisional attachment has been made, any private transfer or delivery of the property attached or of any debt, dividend or other moneys contrary to such provisional attachment, shall be void as against all claims enforceable under the provisional attachment.
    (xiv) Share in property : Where the property to be provisionally attached consists of the share or interest of the concerned person in property belonging to him and another as co-owners, the provisional attachment shall be made by a notice to the concerned person prohibiting him from transferring the share or interest or charging it in any way.
    (xv) Property exempt from attachment:
    (a) All such property as is by the Code of Civil Procedure, 1908 (5 of 1908), exempted from attachment and sale for execution of a decree of a Civil Court shall be exempt from provisional attachment.
    (b) The decision of the Commissioner of Central Excise as to what property is so entitled to exemption shall be final.

    3. Trade & field formations may be informed suitably.

    4. Hindi version will follow.

    Yours faithfully,
    (Ashima Bansal)
    Under Secretary to Government of India

    Copy to:
    1. PPS to Chairman (CBEC)
    2. PPS to Member (CBEC) (All)
    3. Directorates-General/ Directorates under CBEC (All)
    4. Sections under CBEC(All)


  10. #30
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    Thumbs up Service Tax - Circulars -Year 2008 - Trade Notice No.- 06 2008 ,dated - 03-07-2008 - Documents required with ST-1

    Service Tax


    Circular/Instructions/Trade Notices


    OFFICE OF THE COMMISSIONER OF SERVICE TAX

    17-B IAEA HOUSE, M.G. MARG IP ESTATE


    NEW DELHI 110 002

    Date 3-07-2008


    C. No. IV (16) Hqrs/Tech/ST/02(1) Pt. 08


    Trade Notice No.- 06 2008

    Attention of the trade is invited to the documents required to be submitted along with the ST-1 application for the purposeof registration of service tax assesses. The following documents will be accepted for the proof of address and for establishing identity constitution of company.

    2. For Local/Single Registration

    (1) Copy of PAN card of the assessee.

    (2) Proof of the address of the premises to be registered/copy of telephone bill. Electricity bill. Rent agreement in the name of the company or in the name of proprietor/ partner/firm in the case of proprietary or document accepted by any of Central/ State Government Department e.g. i.e. Income Tax. Sales Tax. Registrar of Companies DGFT or passport in the case of address.
    (3) In case of partnership firm: Copy of Partnership Deed.
    (4) In case of companies: copy of Memorandam of Association.

    For Centralized Registration

    3. For Centralized registration in addition to the above documents. The proof of address in respect of each of the premises/branch for which centralized registration is sought for should be furnished in fine with the description mentioned at 2(2) above.

    4. Further there is no need to resubmit all the above documents for addition/ deletion of any services if already submitted to the Department earlier. However (in case of addition of new premises branch. proof of address in respect the new premise is to be submitted.)

    5. The authorized signatory of the applicant should ensure that no column in the ST-1 be left blank or and is correctly and legibly filled in order to avoid delay in issuance of registration. Only legible copies of the documents be submitted to the department.

    Commissioner of Servic


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