CA. N.K. Bharath Kumar
1. What is ST-3 Return?
It is a self assessed statutory document notified
by the Central Board of Excise and Customs which functions under the Ministry of
Finance for the service providers to enable them to declare the value of taxable services provided or received by
them and the taxes paid by them for the same.
2. Why ST-3 Return?
Service Tax Law is
based on Self Assessment. Hence,
it is the obligation of the assessee to inform the Service
Tax Authorities about his taxable turnover and the amount of tax assessed
on the same. The medium to inform the Service Tax
Authorities is called ST-3 return. Only when assessee declares the values of
services rendered and tax amount paid by him, the Service
Tax authorities will be made aware of the fact as per
Self Assessment Mechanism.
3. Who is the person liable for
filing of ST-3 Returns?
As per Section 70 of Finance Act, 1994,
(1) Every person liable
to pay the service tax shall himself assess the tax
due on the services provided by him and shall furnish to the Superintendent of
Central Excise, a return in such form and in such manner and at such frequency
and with such late fee not exceeding twenty thousand rupees, for delayed
furnishing of return, as may be prescribed.
(2) The person or class
of persons notified under sub-section (2) of section 69, shall furnish to the
Superintendent of Central Excise, a return in such form and in such manner and
at such frequency as may be prescribed.
Section 69(2): The
Central Government may, by notification in the Official Gazette, specify such other
person or class of persons, who shall make an application for registration within such time and in such manner and in such
form as may be prescribed.
Therefore, every person who is liable to pay
service tax and class of persons who are notified by
Central Government as per Section 69(2) are the persons liable to file ST-3
returns. Every registered assessee who is holding the Certificate of Service Tax
registration has to file the ST-3 returns in the
intervals specified by the Government till he surrenders the
certificate.
4. What is the periodicity of the
ST-3 return and when the same has to be submitted?
Rule 7 of Service Tax
Rules, 1994 states:
(1) Every assessee shall
submit a half-yearly return in Form ‘ST-3’ or ‘ST-3A’, as the case may be, along
with a copy of the Form TR-6, in triplicate for the months covered in the
half-yearly return.
(2) Every assessee shall
submit the half yearly return by the 25th of the month following the particular
half-year.
Hence, every assessee has to submit a half yearly
return in the form prescribed which is ST-3 in TRIPLICATE along with the copy of
GAR-7 Challans for the six months covered in the half yearly return. i.e. April
– September and October – March. The return has to be submitted within 25th of
the month following the particular half year. In other words, the return for the
period April to September has to be filed on or before 25th October succeeding
the half year and the return for the period October to March has to be filed on
or before 25th April succeeding the half year.
5. Is there any requirement to file
a list of documents and records maintained by the assessee to the
Service Tax Department?
Yes. Every assessee shall furnish to the
Superintendent of Central Excise at the time of filing his return for the first
time a list in duplicate of the following:
a. All the records
prepared or maintained by the assessee for accounting of transactions in regard
to
(a) providing of any
service, whether taxable or exempted;
(b) receipt or procurement of
input services and payment for such input services;
(c) receipt, purchase,
manufacture, storage, sale, or delivery, as the case may be, in regard of inputs
and capital goods;
(d) other activities, such
as manufacture and sale of goods, if any
b. all other financial
records maintained by him in the normal course of business];
6. Whether a return which is filed
can be revised? If yes, then how many times it can be revised?
Rule 7B of
Service Tax Rules talks about “Revision of Return”. —
An assessee may submit a revised return, in Form ST-3, in triplicate, to correct
a mistake or omission, within a period of ninety days from the date of
submission of the return under rule 7.
Explanation. – Where an
assessee submits a revised return, the ‘relevant date’ for the purpose of
recovery of service tax, if any, under section 73 of
the Act shall be the date of submission of such revised return.
Therefore, a return which is filed can be revised
to correct a mistake or omission. The time limit provided for revision of return
is 90 days from the date of submission of the return under Rule 7. The rule
also explains that, for the purpose of recovery of service
tax under Section 73 (Issue of Show Cause Notice) the date of submission
of such revised return will be considered as relevant date to calculate the time limit for issue of Show Cause
Notice.
7. What if I have not filed the
returns within the prescribed due date?
Rule 7C of Service Tax
Rules, 1994 has the reply to the above question.
Amount to be paid for
delay in furnishing the prescribed return. — Where the return prescribed under
rule 7 is furnished after the date prescribed for submission of such return, the
person liable to furnish the said return shall pay to the credit of the Central
Government, for the period of delay of –
(i)
fifteen days from the date prescribed for submission of such return, an amount
of five hundred rupees;
(ii) beyond
fifteen days but not later than thirty days from the date prescribed for
submission of such return, an amount of one thousand rupees; and
(iii) beyond
thirty days from the date prescribed for submission of such return an amount of
one thousand rupees plus one
hundred rupees for every day from the thirty first day till the date of
furnishing the said return:
Provided that the total
amount payable in terms of this rule, for delayed submission of return, shall
not exceed the amount specified in section 70 of the Act:
Provided further that
where the assessee has paid the amount as prescribed under this rule for delayed
submission of return, the proceedings, if any, in respect of such delayed
submission of return shall be deemed to be concluded:
Provided also that where
the gross amount of service tax payable is nil, the
Central Excise officer may, on being satisfied that there is sufficient reason
for not filing the return, reduce or waive the penalty.
Where an assessee is filing the ST-3 return after
the due dates that are
prescribed, he makes himself liable for payment of late fees as imposed by
Section 70 read with Rule 7C of Service Tax Rules,
1994.
The maximum late fee prescribed by the statute is
Rs.20000/- . The mechanism of calculation of late fee is as below:
Delay of 1 – 15 days – Late Fee of Rs.500/-
Delay of 15 – 30 days – Late Fee of Rs.1000/-
Delay of 31st day Onwards – Late Fee
of Rs.1000/- Plus Rs.100/- per day, subject to maximum limit of Rs.20000/-
When an assessee remits this late fee and files
the return, for a particular period, then proceedings if any, in respect of such
delayed submission of return (alone) shall be deemed to be concluded.
The rule also provides that, in case of a NIL
Return, i.e. When the Gross Amount of Service Tax
payable is NIL, the departmental officer (Superintendent of Central Excise /
Service Tax) may reduce or waive the late fee for
delay in filing of returns on providing sufficient cause / reason for non filing
of returns in time.
8. What is the method to file the
Service Tax Return?
The Central Board of Excise and Customs came out
with Notification No.43/2011 – Service tax dated 25 August
2011, amending Rule 7 of Service
Tax Rules, 1994 wherein, it was stated that, “Every assessee
shall submit the half-yearly return electronically”.
Therefore, all the assessees are now required to
file their half yearly service tax return by
electronic mode only.
CBEC vide its Circular No. 919/09/2010
–CX dt. 23rd March,2010 has circulated comprehensive instructions
outlining the procedure for electronic filing of excise and service tax return.
The extract of the circular is as produced below:
The assesses can electronically file statutory
returns of Central Excise and Service Tax by choosing one of the two facilities
being offered by the department at present:
(a) they can file it online, or
(b) download the off-line return utilities which
can be filled-in off-line and uploaded to the system through the internet.
9. What are the steps for preparing and
filing returns?
ONLINE MODE:
Ø Returns can be prepared and filed on line by
selecting the ‘Fill ST-3’ option under RET module after logging into the
ACES.
Ø All validations are thrown up during the
preparation of the return in this mode and the status of the return filed using
the online mode is instantaneously shown by ACES.
OFF LINE MODE:
Ø Returns can also be prepared and filed
off-line. Assessee downloads the Offline return preparation utility available
at http://www.aces.gov.in (
Ø Prepare the return offline using this utility.
The return preparation utility contains preliminary validations which are thrown
up by the utility from time to time.
PROCEDURE TO UPLOAD
Ø Assessee logs in using the User ID and
password.
Ø Select RET from the main menu and upload the
return. Instructions for using the offline utilities are given in detail in the
Help section, under ‘Download’ link and assessees are advised to follow
them.
Ø Returns uploaded through this procedure are
validated by the ACES before acceptance into the system which may take up to one
business day. Assessee can track the status of the return by selecting the
appropriate option in the RET sub menu. The status will appear as “uploaded”
meaning under process by ACES, “Filed” meaning successfully accepted by the
system or “Rejected” meaning the ACES has rejected the return due to validation
error. The rejected returns can be resubmitted after corrections.
Ø Once the Central Excise returns are filed
online in ACES or uploaded to the system using the off-line utility, the
same cannot be modified or cancelled by the assessee, except by filing of
revised return.
Validation of the entries made while filling
return
1. At the time of making entry in the
electronic format of the relevant return, the software does some preliminary
validation for ensuring correctness of data, either concurrently or at the time
of saving / submitting the return. This validation process is automated. The
user is prompted by the application software to correct the particulars entered
wherever required. In respect of certain entries, although the application
alerts the assessee about any entry found erroneous or inconsistent, as per the
automated validation process, the assessee is still allowed to proceed further
to complete data entry of the return and finally submit it electronically. But
in some cases the assessees are not allowed to proceed further unless the error
indicated is corrected.
2. A return filed electronically is subject
to automatic verification process by the application and defective returns are
marked to the departmental officer for review and correction. While reviewing
the return the officer may seek some clarification from the assessee, call for
some information, records or documents which should be furnished by
the assessee. In case of review and correction of returns by the departmental
officers, assesses will receive a message from the application and they can log
in to the application to view the reviewed returns online.
3. Returns, captured off-line using the
Downloadable utility and uploaded later on, are further subjected to certain
validation checks. Processing of uploaded returns, using the off-line versions,
is done at the end of one business day and the status can be viewed by
the assessees under the ‘VIEW STATUS’ link under ‘RET’ module. Status is
described as ‘UPLOADED’, ‘FILED’ or ‘REJECTED’ and they denote as follows:
o UPLOADED denotes that
return is uploaded and under processing (assessees are advised to view the
status after the end of a business day).
o FILED denotes that
uploaded return is accepted by system.
o REJECTED denotes that
return is rejected due to errors. (The assessees are required to correct the
return and upload it again.)
4. There is no provision in ACES application
to allow assessees to make corrections to the returns filed by them. Once the
return is accepted by the system as successfully ‘filed’, no modification can be
made by the assessee. However, if the return is rejected, the assessee can
correct the errors and upload it again. The assessees are, therefore, advised to
take utmost care while fill-in in the returns. They may, however, bring it to
the notice of the departmental officers.
Acknowledgement of E-Filing of the
return
In the case of a Service Tax return filed
on-line, ACES application software acknowledges it by displaying an
Acknowledgement message. A unique document reference number is generated which
consist of 15-digit registration number of the assessee, name of the return
filed, the period for which return is filed etc. This is also automatically
communicated to the email id of the assessee by the application. In the case of
an uploaded Central Excise return, using offline utility, similar
acknowledgement is generated and sent after the acceptance of the return by the
system as a valid return i.e. when the status changes to ‘FILED’.
10. Whether anybody can assist in Filing
of Returns and other documents through the ACES?
CBEC has set up ACES Certified
Facilitation Centres (CFCs) with the help of professional bodies like Institute
of Chartered Accountants of India (ICAI), Institute of Cost and Works
Accountants of India (ICWAI) etc. These CFCc will provide a host of services to
the assessees such as digitization of paper documents like returns etc. and
uploading the same to ACES. Assessees requiring the services of the CFCs may be
required to pay service fees to the CFCs. CBEC will approve the maximum rates at
which CFCs can charge their customers for the services rendered by them. For
this purpose, assessees are required to write to the department authorizing one
of the CFCs, from the approved list, to work in ACES on their behalf. They have
to furnish the name and other details of the CFCs, including the registration No
issued by the ICAI/ICWAI etc. At any given time, one assessee can authorize one
CFC, while one CFC can provide services to more than one assessee throughout
India. In case the assessee wants to withdraw the authorization, it can do so by
intimating the department. However, an assessee will be held liable for all
actions of omission or commission of the CFC, during the period they are
authorized by him/her to work in ACES.
11. Responsibility of the
Assessee
1. It is the legal responsibility of the
assessees, who are required to file returns, to file it within the due date as
prescribed under law. The electronic filing of returns is mandatory for all
2. It may, however, be noted that merely
uploading the returns will not be considered as returns having been filed with
the department.
3. A return will be considered as filed,
when the same is successfully accepted by the application as ‘Filed’ and the
relevant date for determining the date of filing of return will be the date of
uploading of such successfully ‘filed’ returns.
4. In case a return is ‘rejected’ by the
application, the date of uploading of the rejected return will not be considered
as the date of filing, rather the date of uploading of the successfully ‘filed’,
return (after the assessee carries out necessary corrections and uploads it
again) will be considered as the actual date of filing.
In case the assessee experiences any difficulty
in transacting in ACES such as filing of return,
Ø the assessees may lodge a complaint with the
ACES Service Desk or the department by e-mail and/or by telephone, and obtain a
ticket no. as an acknowledgement from the department.
Ø However, mere lodging of complaints with the
ACES service desk will not be a valid ground to justify late filing of
returns.
Ø If the difficulty is not on account of
problems at the assessee’s end, and can be clearly attributed to the
department’s IT infrastructure such as problems in accessing CBEC’s ACES
application due to server, network or application being down, proportionate time
will be deducted from the date of uploading of successfully ‘filed’ returns to
ascertain the actual date and time of filing of the return. Since the department
maintains logs of such technical failures, in case of any dispute, the decision
of the department will be final.
12. SEQUENTIAL FLOW OF WORK IN FILING OF
RETURNS.
a. ONLINE MODE
www.aces.gov.in → Service Tax → Enter User Name
and Password → Go to RET Menu → Fill ST-3 → Fill → Select the Premises for
which return is being filled → Enter the details in ST-3 → Validation part
will come up while you are entering the data like – Enter Numeric data, Value of
Service Tax Payable and Paid does not match, Opening Balances of CENVAT Credit
does not match with the data as per the previous return → Verify the
correctness of the each and every data entered → When you come to final page →
Save the return → You will get a PDF file of the entire return filed by you →
Take a print out → Go through the return twice to identify the corrections to
be made if any → If corrections are there → Click Modify → Make the
Changes → Again come to final page and save → Check whether the changes have
been incorporated → Self assure your self that data is clear and correct →
Submit the Return → It will ask for confirmation → Provide Yes and Submit
it → You will get an acknowledgement of return being filed successfully →
Print it and keep it in your file → Go to RET Menu → View ST-3 → Enter the
period for which the return is filed → You will get a window with the
details → click on the Hyperlink provided with the acknowledgement number of
the ST-3 filed by you → ST-3 in PDF will open up → check the status for the
entry “FILED” → Take Print and save it in your file.
Note – 1:
During the time of saving the return and taking
print out for verification, if the website is left idle for 30 minutes, the
session may expire. Hence, during this time, if it is possible to review and
file within 30 minutes, you can proceed to file. Else, you can still save the
return and log out and check your saved return.
After Checking your saved return →
www.aces.gov.in → Service Tax → Enter User Name and Password → Go to RET
Menu → Fill ST-3 → Select Amend ST-3 → Enter the Period for which the return
was saved → Click on the Hyperlink of the return appearing on the screen → The
ST-3 will open up from the first page with the all data that were keyed in →
Make the necessary changes and Save it → click the submit button and your
return is FILED.
Note – 2:
During the time of filing of return online, in
case, you are unable to complete the return and it is left half way due to say
power failure or network connectivity, ..etc In such case:
Go to → www.aces.gov.in → Service Tax → Enter
User Name and Password → Go to RET Menu → Fill ST-3 → Select Complete ST-3 →
Enter the Period for which the return was being filled → Click on the Hyperlink
of the return appearing on the screen → The ST-3 will open up from the first
page with the all data that were keyed in → Make the balance entries and Save
it → click the submit button and your return is FILED.
b. OFFLINE MODE
Part-1 : www.aces.gov.in → Download → Under
Excel Utility → Download ST-3 Return Excel Utility → Open the Excel Utility →
Ensure Macros are enabled → Fill the ST-3 Return → Validate the return and
generate XML File
Part-2: Go to → www.aces.gov.in → Service Tax
→ Enter User Name and Password → Go to RET Menu → E Filing → Upload File →
Select the Financial Year → Select the Half Year period for which the return is
being filed → Choose the XML File generated to be uploaded → Upload the File
→ It will ask for confirmation → Confirm the submission → Your return will be
successfully uploaded → You will be able to view the status of the return filed
after one business day.
Part–3: Go to → www.aces.gov.in → Service
Tax → Enter User Name and Password → Go to RET Menu → E-filing → View
Status → Enter the Period for which the return was uploaded → Example :
01/04/2011 to 30/09/2011 → The status of the return will be either “REJECTED /
FILED” → If rejected, the hyperlink of the return filed will appear → Click
on the Hyperlink → It will show the error in the return → Modify the Excel
Utility Sheet and generate XML again follow the same procedure as mentioned in
Part 2
In case the status is FILED → Go to RET Menu →
View ST-3 → Enter the Period for which the return was uploaded → Example :
04/2011 to 09/2011 → You will get a screen with the details of the return filed
for the period → Under Return Number, you will get a Hyperlink of the return
filed → click the same → You will get a PDF file of the return filed → Take
Print and Save it in your file.
———-
CA. N.K. Bharath Kumar
Email: bharat@ssaca.in
source: taxguru.in
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