Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Service Tax »
Open DEMAT Account in 24 hrs
 Tax e-filing: New banks enabled for online tax payments via e-pay tax service Check the entire list of banks
 Income Tax Bill 2025: Changes under the new bill that taxpayers must know. Check FAQs
 ITR filing: Know the new Budget 2025 rules for filing updated income tax returns
 New Income Tax Bill 2025: What are expected changes and how will they affect you?
 From tax changes to capex growth 5 key expectations from Emkay Global for Indias economy
 Income Tax Returns: What are the consequences of not verifying your ITR within 30 days
 Income Tax: Want to update your ITR? You can file an updated tax return; Here s all you need to know
 ITR Filing 2024: How to check income tax refund status online using PAN card? A step-by-step guide
 ITR Filing 2024: Which Income Tax Regime Is Better For NRIs? Check Expert Inputs Here
 ITR filing 2024: How to check income tax refund status online? A step-by-step guide
 Income Tax Return: Why should you wait till June 15 to file your ITR for FY24?

Common return for service tax, excise duty on back burner
January, 06th 2014

After a Goods & Services Tax (GST), implementation of another indirect tax reform, it turns out, is unlikely to see the light of day soon. The finance ministry is leant to have put its plan to harmonise service tax and central excise duty returns on the back burner.

An indefinite deferment of this measure, meant to simplify business processes, implies assessees will continue to file separate returns for service tax and excise duty till a GST is introduced.

According to officials, a common return for central excise duty and service tax was envisaged when 119 services were taxed. However, with the introduction of a ‘negative list’ for taxation of services in July 2012, it became difficult to merge the two forms. An internal committee formed by the Central Board of Excise and Customs (CBEC) had made this observation.

“The proposal has been discarded. There were many issues, including different periodicity of the returns and the new reporting format under the negative list,” said a finance ministry official, asking not to be named.

In the negative-list regime, introduced in July 2012, all services that do not figure on the list are taxed. It has about two dozen categories of services that are exempt.

The idea of harmonisation was to introduce monthly and quarterly filing of returns, and payment of taxes, for both service tax and excise duty. Under the current practice, returns for excise duty are filed on a monthly and quarterly basis, while that for service tax is filed on a half-yearly basis. On the other hand, payment of taxes are not aligned with service tax returns. The service tax payment is made every quarter in the case of individuals and proprietary & partnership firms, whereas it is done every month by all others.

According to the harmonisation proposal, the assessees who paid service tax of Rs 25 lakh or more in a previous year and new assessees other than individuals and firms were to file returns on a monthly basis, while the rest needed to do so every quarter.

“This will improve cash flow for small businesses registered as companies or other corporate bodies, while it will make large non-corporate entities pay tax on monthly business,” CBEC had said.

Also, a harmonisation could have facilitated better audit by bringing down paperwork in filing of the two returns — from about 15 pages to one page.

It was also seen as a precursor to the introduction of GST, which is to subsume most indirect taxes. But now the thinking in the finance ministry is that a single return will add an unnecessary process. So, it will be prudent to wait for the GST rollout.

The plan to bring a single form for service tax and central excise duty was announced in Budget 2012-13 by Pranab Mukherjee, the then finance minister. The announcement to introduce a negative list was made in the same Budget. Soon after, in April 2012, CBEC had issued a circular proposing amendments to harmonise returns for excise duty for service tax. These forms were never notified.

The U-turn on the return harmonisation plan means another of Mukherjee’s decisions has been reviewed by Finance Minister P Chidambaram. Some other such decisions are provisions related to the General Anti-Avoidance Rules, tax demand on Vodafone, fiscal deficit target for 2012-13 and negotiations with states on GST and Central Sales Tax compensation.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2025 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting