Now this is to file the Income Tax return for Asst Year 15-16 and CBEC has declared on 30.06.2015 the detailed manual scrutiny of St-3 filed for earlier years. So Assessee should reconcile the receipts and service tax liability with income tax return. The St-3 for Financial year 2014-05 have been filed before 25.04.2015 and now before filing of Income Tax return every body subject to service tax should review the ST-3 already filed. The St-3 can be revised with in 90 days from the date of filing.
Central Board of Excise and Customs has passed a circular 185/4/2015-service tax on 30 June 2015, for the manual scrutiny of Service Tax Return.
Central Board of Excise and Customs has passed a circular 185/4/2015-service tax on 30 June 2015, for the manual scrutiny of Service Tax Return.
For a strong compliance
verification mechanism there are three important steps:
a) Audit
b) Anti-evasion and
c) Return Scrutiny
For a strong "Return
Scrutiny" system again can be divided into two procedural methods i)
Preliminary Online Scrutiny
ii) Detailed Manual Scrutiny.
As per CBEC the detailed
scrutiny of ST-3 returns, with effect from 01.08.2015, should be carried out in
the manner below:-
Preliminary Online
scrutiny
The purpose of preliminary
scrutiny of returns includes ensuring the completeness of the information
furnished in the return, arithmetic correctness of the amount computed as tax
and its timely payment, timely submission of the return and identification of
non-filters and stop-filters. On the basis of the validation checks
incorporated in ACES preliminary scrutiny of all returns is done online.
Detailed Manual
Scrutiny
Purpose of
detailed Scrutiny:
The purpose of the detailed
manual scrutiny of returns is to ensure the correctness of the assessment made
by the assessee. This includes the following measures:
ü Checking the taxability of the
service.
ü The correctness of the value of
taxable service
ü The effective rate of tax after
taking into account the admissibility of an exemption notification, abatement,
or exports, if any;
ü Ensuring the correct
availment/utilization of CENVAT Credit on inputs, capital goods, and input services.
Selection of
Return of Detailed Scrutiny:
The detailed return scrutiny
would be conducted in respect of such assessee whose total tax paid (Cash +
CENVAT) for the F.Y. 2014-15 is below Rs 50 lakhs. Each Commissionerate has to
select equal number of assessee for carrying out returns scrutiny from each of
these three total taxes paid bands viz., Rs 0 to Rs 10 Lakhs, Rs 10-25 lakhs
and Rs 20-25 lakhs for the F.Y. 2014-15.
Checklist for Detailed Manual Scrutiny
ü Reconciliation for validation of
the information furnished in ST-3 return;
ü Taxability in respect of
services which may have escaped assessment;
ü Classification - for the purpose
of due availment of abatement/exemption benifit);
ü Valuation and
ü CENVAT Credit
availment/utilization.
(Note: In case of any
additional details required, the same may be obtained from the assessee through
requisition rather than through a visit. Calling of such additional documents
must be done with the approval of jurisdiction DC/AC so as to obviate the complaint of administrative
intrusion).
The CBEC has tightened the rope by laying down the procedure
for Documenting the Findings as given hereunder:
In order to ensure
transparency of the Scrutiny Process, for this, an observation sheet should be
prepared as Annexure IV, bears
one-to-one co-relation with the checklist.
It is also possible
that the officer may come across some issues which may have to be referred to
audit or anti-evasion.
In cases where detailed
scrutiny of returns in detection of defaults in service tax payment it appears
that the proviso to section 73(1) of the Finance Act, 1994 is invoked, the ST-3
returns of the past periods should also be verified and the results of such
verification should be recorded.
All Scrutiny findings
in a month must be discussed in a Monthly Scrutiny Monitoring Committee Meeting
headed by the Additional/Joint Commissioner in-charge of the Division where
each range should present their scrutiny findings in a form of a 'Scrutiny
Report' given as Annexure V.
The timelines to be
followed for starting detailed manual scrutiny as per the detailed process
below:
ü Forwarding of official mail ids
of the Zonal Nodal Officers by 06.07.2015
ü Forwarding of data by DGS &
DM by 08.07.2015
ü Finalization of the list of the
returns of the assessee selected for detailed manual scrutiny and dispatch of
the intimation Letter by 15.07.2015
ü Commencement of Detailed Manual
Scrutiny of selected returns by 01.08.2015
Note: Even after
the introduction of GST, it may be appreciated that the basic principles of
scrutiny of returns and reconciliation of records would remain the same.
