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Manual Scrutiny of Service Tax Returns vis-à-vis ITR Form 4/5/6 and 26AS w.e.f. 01.08.2015

With the introduction of POT Rules, 2011 and advent of Negative list based comprehensive taxation of services in 2012, Service Tax Wing, CBEC unveiled the revised procedures for scrutiny of returns that must be followed by the Revenue with effect from 1st August, 2015 vide Circular No. 185/4/2015-ST,Dated: July 07, 2015.

Scrutiny of Returns forms one of the three prongs of compliance verification – the other two being ‘audit’ & ‘anti evasion’. The main purpose behind such scrutiny is to ensure the correctness of assessment, checking the taxability, correctness of value of service u/s 67, effective rate of tax after taking into account any exemption notification or abatements, correctness of availing & utilisation of CENVAT credit. For this purpose, a Return Scrutiny Cell will be created in Commissionerate Headquarters. Focus will be on those assessees whose returns are not been audited.

The detailed return scrutiny of those assessees whose total tax (Cash + Cenvat) for FY 2014-15 is below INR 50,00,000/-. It will be conducted by Range officers headed by Superintendent under the supervision of Divisional AC/DC. But before such scrutiny is commenced, assessee will be given prior intimation of at least 15 days.

The significant aspect of the aforesaid scrutiny is to ensure validation of the information furnished in self-assessed ST-3 with the intent to reconcile the information furnished in ST-3 with ITR Form 4/5/6 and 26AS.


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