Auto Cancellation of Excise, Service tax Registration for non filing of Returns

Auto Cancellation of Excise, Service tax Registration for non filing of Returns

DT. 07.04.2012

Government Proposes Automatic Cancellation of Excise, Service tax Registration for non filing of Returns

Registration of a manufacturer will be cancelled automatically if excise duty returns are not filed for six months, as per the latest government proposal. In case of a service provider, the registration will be cancelled automatically if return is not filed for 12 months, said the draft of the common excise duty and service tax form on which the Revenue Department has sought comments from stakeholders by April 30. Cancellation of the registration can be done either on the request of assessee when he surrenders the registration or suo motto by the department after following the principles of natural justice. Before cancellation, the Proper Officer shall verify with regard to the pending dues and other pending matters against the assessees and take appropriate action. Thereafter the registration shall be cancelled. Cancellation in no way shall absolve the person from any of the legal liabilities created on him in the past.

Cancellation of the registration on surrender of registration: Registrant can at any time surrender his registration.

Cancellation of the registration suo motto by the department

i. The cancellation of registration is not punitive measure. For the offences committed under the Central Excise Act, 1944, or Chapter V of the Finance Act, 1994, proper action should be taken against the registrant for the offences committed under the relevant penal provisions in the Central Excise Act, 1944 or the Chapter V of the Finance Act, 1994.

ii. Cancellation of the registration shall be only on account of non-filing of the returns for a specified period that is:-

• 6 months for normal assessees and 12 months for assessees availing value based exemption for Central Excise registrants,

• 12 months for Service tax registrants.

iii. For the suo motto cancellation of the registration the proper officer shall issue a notice to the registrant indicating the grounds for cancellation. After allowing him the opportunity to make representation against the said notice and following the principles of natural justice cancel the registration granted.

iv. Since Cancellation is not punitive, it will not debar the person from making fresh application for registration when he desires to restart the business.

On cancellation of the registration, the fact about cancellation of the registration shall be published and put in public domain so as to avoid any misuse of the cancelled registration.

Any service used by manufacturer directly or indirectly in or in relation to manufacture of final products constitutes input service

Any service used by manufacturer directly or indirectly in or in relation to manufacture of final products constitutes input service

Dt. 06.04.2012

It was held that any service used by the manufacturer whether directly or indirectly in or in relation to the manufacture of final products constitutes input service. The catering service, rent-a-cab and transportation services and the tax paid on the said services are stated as input services.

HIGH COURT OF KARNATAKA AT BANGALORE

COMMISSIONER OF CENTRAL EXCISE, BANGALORE-I

Versus

BELL CERAMICS LTD.

C.E.A. No. 114 of 2010, decided on 15-9-2011

[Judgment per : N. Kumar J.]. – The Revenue is before this Court in the appeal challenging the order passed by the Tribunal [2011 (21) S.T.R. 417 (Tribunal)], which has held that the Service tax paid by the assessee under a rent-a-cab service and outdoor catering service, to respectively transport its employees to the factory and back and to provide food for them fall under the input services entitled to credit.

2. The said question arose for consideration before this Court in the case of Commissioner of Central Excise, Bangalore-III, Commissionerate v. Stanzen Toyotetsu India (P.) Ltd., reported in 2011 (32) STT 244/12 taxmann.com 101 (Kar.) = 2011 (23) S.T.R. 444 (Kar.). It was held that any service used by the manufacturer whether directly or indirectly in or in relation to the manufacture of final products constitutes input service. The catering service, rent-a-cab and transportation services and the tax paid on the said services are stated as input services. In that view of the matter, the substantial question of law framed in this appeal is answered in favour of the assessee and against the revenue.

3. Appeal stands dismissed.

Service Tax Return / Payment – Monthly, Quarterly, Half yearly?

Service Tax Return / Payment – Monthly, Quarterly, Half yearly?

DT. 05.04.2012

Budget 2012 Presented by Finance Minister on 17.03.2012 proposed that the cycles for the payment service tax and filing of return should coincide. In View of the same Following Changes are proposed in Rules Related to periodicity of Service tax Return Filing and Service tax payment.

Filing of Return of Service Tax

It is provided that an assessee whose service tax liability was Rs. 25 lakhs or more in the previous year and in case of a newly registered service provider other than individual or firms, will have to file return “Monthly”.

And in other cases i.e. Individuals and partnership firm or proprietary firms having paid service tax of less than Rs. 25 lakhs in previous year, will have to file return ‘Quarterly’.

Quarterly return	Monthly return
Individual/Firm/LLP assessee Any amount of tax liability in immediately preceding financial year Assesses other than Individual/Firm/LLP Tax liability less than 25 lakhs in immediately preceding financial year	Assesses other than Individual/Firm/LLP Tax liability more than 25 lakhs in immediately preceding financial year

 

Payment of Service Tax

Rules relating to payment of service tax has been rationalised. At present only Individuals or Firms are allowed to pay the taxes on quarterly basis. Now this relaxation has been given to every small assessee. The same can be understood with the following table:-

S. No.	Amount of tax paid in previous year	Individual/Firms & New Assessee (Irrespective of constitution)	Other than Individual/Firms
1.	Upto Rs. 25.00 lacs	Quarterly	Quarterly
2.	More than Rs. 25.00 lacs	Quarterly	Monthly

 

In an another important change, now every Individual or firm (including LLP) can pay service tax on receipt basis provided their turnover in previous year (FY 2011-12 for 2012-13) towards taxable service was upto Rs. 50.00 lacs.