Bhilai firm pays service tax, yet not issued registration A K Banerjee THE Raipur Commissionerate’s Bhilai Division II has refused to issue service tax registration certificate to a party that claims to have deposited service tax as well as the relevant documents over one and a half years ago. M/S Asha Realities, Bhilai Durg, Chhattisgarh is engaged in construction business that falls in the ambit of service tax. The firm applied for online service tax registration online on 20/5/2010 to Central Excise Division II, Bhilai, Raipur commissionerate. Thereafter, an email dated 20/5/2010 was sent to Asha Realities from the Aces Administration, confirming that a user login has been created for the company. Further, in acknowledgement to the online submission of ‘ST1’ form submitted by M/S Asha Realities, the department intimated that “your application having registration number aapfa8721msd001 is submitted with commissioner Raipur”. The said acknowledgement further stated that a new assessee seeking registration in service tax will submit it to the jurisdictional range officer with a printout of the application form submitted online duly signed by the authorised signatory along with attested copies of PAN number, proof of residence, constitution of the applicant, power of attorney of the authorized person. It was further mentioned in the acknowledgement that after satisfactory verification registration certificate will be issued. It so happened that when an employee of Asha Realities went to deposit the relevant documents as required under the Act to Service Tax, Bhilai Division, the officer concerned is learnt to have taken all the documents without issuing any receipt in acknowledgement. This modus operandi of the Central Excise officers is well-known; the motive behind it, too, is obvious. Only in this case, it is learnt the motive became 10 times stronger than the usual. The service tax department seems to have forgotten the sting operation that happened at the Delhi Service tax few years ago. The Division II Bhilai also did not accept the service tax returns of the party, citing one reason or the other. It is also learnt that the officers told the party not to send any copies of the documents by speed post, thereby leaving no documentary evidence that can be produced in the event of a complaint. The documents sent online are a clear-cut testimony to the fact that the assessee had applied for registration under service tax and the department has to issue a registration certificate and Tax Payers Identification Number (TPIN) after satisfying themselves. However, the same was not issued for reasons as the party apparently could not ‘satisfy’ the officers of the Bhillai division. Attention is invited towards Rules 4 and 6 of the Finance Bill 1994 which deals with the Registration & Payment of service Tax. Rule 4: Registration. (1) Every person liable for paying the service tax shall make an application to the concerned Superintendent of Central Excise in Form ST-1 for registration within a period of thirty days from the date on which the service tax under section 66 of the Finance Act, 1994 (32 of 1994) is levied : *Where an assessee is providing more than one taxable service, he may make a single application, mentioning therein all the taxable services provided by him, to the concerned Superintendent of Central Excise. *The Superintendent of Central Excise shall after due verification of the application form, grant a certificate of registration in Form ST-2 within seven days from the date of receipt of the application. If the registration certificate is not granted within the said period, the registration applied for shall be deemed to have been granted. *Where there is a change in any information or details furnished by an assessee in Form ST-1 at the time of obtaining registration or he intends to furnish any additional information or detail, such change or information or details shall be intimated, in writing, by the assessee, to the jurisdictional Assistant Commissioner or Deputy Commissioner of Central Excise, as the case may be, within a period of thirty days of such change. *On receipt of the certificate under sub-rule (7), the Superintendent of Central Excise shall ensure that the assessee has paid all money due to the Central Government under the provisions of the Act, and the rules and the notifications issued thereunder, and thereupon cancel the registration certificate Rule 6: Payment of service tax. *The service tax shall be paid to the credit of the Central Government by the 5th of the month immediately following the calendar month in which the payments are received, towards the value of taxable services: Provided that where the assessee is an individual or proprietary firm or partnership firm, the service tax shall be paid to the credit of the Central Government by the 5th of the month immediately following the quarter in which the payments are received, towards the value of taxable services: Provided further that notwithstanding the time of receipt of payment towards the value of services, no service tax shall be payable for the part or whole of the value of services, which is attributable to services provided during the period when such services were not taxable: *The assessee shall deposit the service tax liable to be paid by him with the bank designated by the Central Board of Excise and Customs for this purpose in Form TR-6 or in any other manner prescribed by the Central Board of Excise and Customs. Provided that the assessee, who has paid service tax of rupees fifty lakh or above in the preceding financial year or has already paid service tax of rupees fifty lakh in the current financial year, shall deposit the service tax liable to be paid by him electronically, through internet banking. [Inserted vide Notification No.27/2006-ST dated 21st September 2006] *Where an assessee has paid to the credit of Central Government service tax in respect of a taxable service, which is not so provided by him either wholly or partially for any reason, the assessee may adjust the excess service tax so paid by him (calculated on a pro rata basis) against his service tax liability for the subsequent period, if the assessee has refunded the value of taxable service and the service tax thereon to the person from whom it was received. Since the Central Excise, Raipur did not issue the ST2 Registration certificate to M/S Asha Realities despite several verbal requests and submission of relevant documents, the party deposited service tax amounting to Rs 3,36,072 on 10/08/2010 in the State Bank of India, Bhilai, under challan serial no 157; Rs 3,13,985 on 10/8/2010 under challan no 165; Rs 1,90,280 on 31/3/2011 under challan serial no. 391 of the State Bank of India. The NSDLchallan status for assesses of the department also confirms the challan no mentioned above shows the payment of service tax by Asha Realities. The assessee is learnt to have met the officers in the Bhillai Division for issuance of the ST2 certificate but without any success. The question arises that when service tax rules say that the registration certificate ST2 has to be issued within seven days of the application, why has the same not been issued till date and whether any monitoring is being done by the senior officers of the Raipur Commissionerate in this respect. However, the CBEC, vide its circular no 955/16/2011-CX dated 15th September 2011, made mandatory e-filing of Central Excise Returns in ACES for the assesses to submit the prescribed Central Excise Returns electronically w.e.f. October1, 2011. However, the officers are learnt to have not been issuing registration certificates as well as TPINs to the parties, in the absence of which the assessee cannot make e-payment and file e- return. Meanwhile, the Superintendent of Bhillai Division II, Raipur, vide a letter dated CNoIV(16)INV/ builders; Tax /03(PREV) 2011/ Div II / Bhilai/ 5485 dated 30/11/2011, sent a letter to Asha Apartment, 395 Pragati Nagar, Bhillai Durg (CG) (The address is same as that of Asha Realities), requesting that service tax liabilities in respect of the services rendered by the company be determined and deposited and copies of annual report/trail balance of the company for the last five years may be sent for verification. This letter goes on to indicate that the previous branch of Bhilai Division II is in the habit of sending letters enmasse to companies for sending records for verifications. It needs to be investigated as to who gave this order to the said superintendent to call for the records for verification from parties, and under which rule and how many parties have forwarded their records for verification. At the same time, it needs to be investigated as to how much revenue the said superintendent has deposited after he sought records from various parties. The CBEC should conduct an inquiry to stop this blatant abuse of power and also see to it that the system is fine tuned to do away with rules, which the government frames for the benefit of the trade but which is misused by the Central Excise officers. Otherwise, the FMs will continue to cry hoarse about revenue, and certain revenue officials will not even allow tax payers to even make the beginning. For once, CBEC should not contest the allegation of the CAG that it is not doing enough to enhance taxpayers’ coverage. For, the remark appears to be too liberal.
Posted on: Sun, 10 Nov 2013 17:42:17 +0000
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