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Guide to Filing Service Tax Returns in India
Many business entities in India were unfamiliar with the annual compliance of Service Tax although their businesses were registered under the Service Tax Registration.
For the various types of services provided in India, an indirect tax was imposed which was known as Service tax (levied until 30 June 2017). As the term implies, Service taxes were levied for the labour rendered by a provider. This tax was imposed when someone completed work on someone else’s behalf or provided professional assistance. The Finance Act of India was the act that governed Service tax in the country, until the tax was replaced by GST on 1 July 2017.
Any individual or entity had to file Service Tax Returns and this was applicable for those who were under the liability to pay service tax or those that were registered under service tax. Filing of Form ST-3 or Form ST-3A was required for filing Service Tax Returns. The Service tax returns were furnished on a half-yearly basis and this tax return had to be filed online. These have since been replaced by GST returns.
The payment for Service tax could be done either electronically or manually before the specified due date. Based on the type of industry that the business was based in, the due date for the furnishing or collection of Service tax was determined.
All India ITR assisted taxpayers in filing service tax returns online through swift and user-friendly methods during the service tax era. Our professional tax experts now assist individual taxpayers and entities with GST compliance and income tax e-filing under the current rules.
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Factors Crucial to e-file Income Tax Returns
E-filing income tax returns is an easy and convenient means. Individuals or entities that should file for tax returns are as follows:
- Any taxpayer with a total yearly income of Rupees 5 Lacs or more.
- Individual or HUF India residents who own assets outside of India.
- All assessee mandated to furnish report of audit mentioned under sections 10(23C) (IV), 10(23C) (v), 10(23C) (VI), 10(23C) (via), 10A, 12A (1) (b), 44AB, 80IA, 80IB, 80IC, 80ID, 80JJAA, 80LA, 92E or 115JB of the Income Act.
- Taxpayers mandated to notify the assessing officer under the policy of Section 11(2) (a).
- Under ITR 5, any firm, Association of Persons (AOI), Body of Individuals (BOI), Cooperative Society, Artificial Juridical Person or Local Authority that does not come under the provisions of section 44AB must file for returns.
- An assessee who is mandated to furnish returns under Section 139 (4B) (ITR 7).
- An Indian resident who is the signatory authority for any account which is outside India.
- A resident who claims for relief under sections 90 and 90A or deductions under section 91.
- All corporate companies of India.
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The Exemptions Under Service Tax in India
In India, usually, service tax was imposed on all services except for those services specified in the negative list of services. No entity, either public or government entity, was exempted from Service Tax payments. Every service provider inclusive of the central and state government or private sector service providers was liable to pay service tax.
An exceptional few cases could be listed wherein the service providers could avoid paying service tax if they fell under any of the exemption criteria:
- Service providers operating small scale or individually operated services could benefit from service tax exemption. This benefit could be availed if the total turnover of taxable services within a financial year did not go beyond Rupees 10 Lacs.
- The end recipient could avail service tax exemption for goods or services received if the recipient could produce a written verification that indicated the value of the goods and materials. Duty charge was also exempted on such goods and materials if the services had been furnished as per the rules of the CENVAT Credit policy.
- Port services, goods transport services and containerised transport services provided to an exporter which were used for exporting of goods were exempted from service tax. If any service tax was charged to the exporter at any stage, the tax which had been paid by the exporter was refunded.
- Indian services provided to any international organizations or the United Nations were not taxable under the Service Taxation Act.
- Service tax was also exempted for service providers who provided facilities for developing the Special Economic Zone (SEZ) or for the benefit of any unit of Special Economic Zone.
Filing for Service Tax Returns Online
The procedure to file a Service tax return could be done via two methods (both through the ACES portal, which served this purpose until GST returns took over):
Online Filing of data in Service Tax Return:
- The taxpayer had to be registered under Automation of Central Excise and Service Tax (ACES).
- The ACES Declaration Form had to be filled and deposited with the respective Range Superintendent.
- The taxpayer had to ensure that all the details were entered correctly. The taxpayer’s email ID could be used as the Temporary Personal Identification Number (TPIN) while the password was emailed to this ID.
- Upon receiving the TPIN and password the taxpayer had to visit the official website of ACES Government and select the service Tax option to log in.
- After entering the TPIN and password the taxpayer gained access to his/her account. For 1st time users, the password had to be changed manually, as for the TPIN, it remained the same.
- Click on the ‘RET’ (Return) and choose the option ‘fill ST3’.
- The assesses’ premises code and the address of where the premises was registered appeared on the page. A code directed the page to a hyperlink that prepared the ST3 returns.
- The taxpayer then had to file the tax return and select ‘save’, leading to a confirmation page about the returns.
- To make changes to the returns, the taxpayer clicked on ‘Modify’ and then saved the changes.
- On successful submission of returns, a confirmation displaying the unique number for the return confirmation was provided.
A return could be revised once in every 90 days by clicking ‘revising ST3’.
Offline filing of data in Service Tax Return using Excel Utility:
- A taxpayer had to visit the official ACES website and select the ‘download’ at the homepage.
- Select ‘Central Excise & Service Tax’ and select ‘download ST3 Return Excel Utility’.
- Fill the excel form to prepare the return.
- After filling all the credentials the taxpayer clicked on ‘Validate & Submit’ to generate an XML file (and saved the XML file).
- Login to ACES and go to ‘RET’ menu.
- Under the ‘E-filing’ option select ‘upload file’.
- Save the return by selecting ‘save’ and then click ‘Submit’ to file the return.
- Upon successful upload, a return confirmation appeared without any unique number.
For viewing the status of a Return the taxpayer clicked on ‘RET’, selected the ‘E-filing’ option and then ‘View Status’. If the Return had been filed on or before the due date, the status showed ‘Filed’. Since 1 July 2017, indirect tax returns are filed on the GST portal instead — see GST returns.
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Points to be noted while e-filing Returns
- Taxpayers cannot file for tax returns under one mobile number or one email address unless the changes are made on the official website of the government.
- If the taxpayer’s name which is mentioned in his/her bank documents and official statements vary even slightly from that given in the PAN card, the portal will document the differences as two different individuals.
- For a non-resident Indian (NRI) both an India number and a foreign number (country of residence) will be required to file income tax returns.
