Skip to main content

Small service providers on tax radar

Those Who Paid Service Tax Of Up To Rs.50L In FY15 To Face Manual Scrutiny
Small service taxpayers will soon find themselves subjected to detailed manual scrutiny by the taxman. The Central Board of Excise and Customs (CBEC) recently issued detailed scrutiny guidelines for service-tax returns of small taxpayers.These guidelines are to be followed from August 1.
Typically, only large service taxpayers come within the ambit of service-tax audit. Small service providers, whose tax liability was not significant, didn't come under the radar of this audit and there were possibilities of tax leakages. The scrutiny procedure aims at plugging such leakages.
The scrutiny will be conducted for those service providers whose total service tax paid (through cash and as a service tax credit) for the financial year (FY) 2014-15 is be low Rs 50 lakh.
While a preliminary online scrutiny will take an overall view such as examination of the timely payment of service tax or arithmetical accuracy of the tax computed, the detailed scrutiny , which will be carried out manually , will be a deep-dive exercise. It will involve checking the taxability of the service rendered, the effective rate of tax applicable, and also ensure that the service taxpayer has correctly availed any CENVAT credit. While conducting such scrutiny , the range officer will rely on documents like agreements, contracts and invoices.
“Service taxpayers will be divided into three bands based on the tax paid for the FY 2014-15 -up to Rs 10 lakh, between Rs 10 lakh and Rs 25 lakh and between Rs 25 lakh and Rs 50 lakh. An equal number of service taxpayers will be picked up for the detailed manual scrutiny from each of the three bands. If a service taxpayer has been audited in the previous three years, his case will not be picked up for the detailed manual survey ,“ explains an EY communique.
“ A host of service providers will now fall within the scrutiny ambit; professionals like chartered accountants, company secretaries, consultants, small restaurant and hotel owners, small businesses like courier agencies, commission agents and share-brokers will all be covered,“ says Bipin Sapra, indirect tax partner at EY .
“To an extent, there is an apprehension that the manual scrutiny , which involves interaction by the service tax authorities with small service taxpayers, could lead to harassment,“ admits a committee member of a business association.
While the focus is on the small service taxpayers, on the direction of the chief commissioner, service-tax returns of larger service taxpayers can also be scrutinized. But in no case can a service taxpayer be subjected to both audit and the detailed manual scrutiny . The detailed manual scrutiny will be done on a yearly basis, by combining two half-yearly servicetax returns so that reconciliation with the income-tax (I-T) returns is also possible.
The CBEC, in its circular, has also clarified that “even after the introduction of Goods and Service Tax (GST) it may be appreciated that the basic principles of scrutiny of returns and reconciliation of records would remain the same“.
During the current fiscal commencing April 1, 2015, indirect tax collections for the first two months were Rs 96,128 crore with service-tax collections standing at Rs 27,607 crore.
Times of India, New Delhi, 11th July 2015

Comments

Popular posts from this blog

Data storage norm splits digital payments industry

Data storage norm splits digital payments industry  India’s nascent digital payment industry could be thrown into disarray due to the demand by the Reserve Bank of India (RBI) that all user data be stored within the country, fears an industry grouping, which has termed the decision as “heavy-handed”, even as others, including the country’s largest digital payment provider Paytm, have hailed the move.  In a bid to narrow the growing schism, the industry is planning to send a formal representation to the regulator highlighting its concerns, a top official told ET.  “We are trying to build a consensus on the issue," said the person adding that the representation to the central bank will be ready this week.  RBI on April 6, mandated all payment companies—global and local—to set up data storage facilities within India by October. The stringent six-month deadline has attracted the ire of several sections of the industry that fear it will lead to a disruption of wel...

Offer’s for all of you

Great Bumper Dhamaka Offer’s for all of you... It's Time to see your Business Online, WebeCreator Offer Website Designing with domain & Email @ nominal charges. For a year For More information visit us http://goo.gl/KlpppF call on 9890151261/9773197533  drop a mail to sales@webecreator.com

Sebi to finalise options in commodities today

The Commodity Derivatives Advisory Committee of the Securities and Exchange Board of India ( Sebi) will meet on Friday with senior officials of the latter, to give a final shape to the rules on options trading in commodity futures, beside revising the warehousing norms to ensure good delivery on settlement. The decision taken, after discussing with the advisory committee, will be placed before the regulator’s board, to finalise the regulations. According to knowledgeable sources, three commodities in each segment, agricultural and non- agricultural, have been proposed for introducing options. It appears commodities from the soya and guar segments are preferred in the former. From the non- agri segment, it is likely that gold, silver and crude oil will be finalised. All these These have better liquidity and both the National Commodity and Derivatives Exchange and the Multi Commodity Exchange, respectively, will be able to introduce the options. In the equity segments, options ar...