The service Tax Wing of CBEC has decided to change the guidelines for detailed service tax return scrutiny with effect from 1st Aug 2015. This decision has been taken to comply with the recent important changes in the service tax. Scrutiny is critical examination of the information/documents submitted and calculation of correct tax.
The new procedure is as follows:
PRILIMINARY ONLINE SCRUTINY
Online service tax return scrutiny is based of various online validation checks incorporated.
DETAILED MANUAL SCRUTINY
On the basis of certain criteria’s of CBEC, an assessee is subject to detailed manual scrutiny. It includes checking the taxability of the service, the correctness of value of taxable service and effective rate of tax after taking into account exemption notifications, abatement, export, correct credit of input, credit of capital goods and input services.
SELECTION OF RETURN FOR DETAILED MANUAL SCRUTINY
Mainly focus of scrutiny will be on those returns which are not subject to audit under any other laws. Like a service tax return of Proprietary concern or partnership concern.
Assessees whose total tax paid (cash + CENVAT) is less than 50 lacs, are subject to detailed service tax return scrutiny. All the returns are divided in three total tax paid bands
i.e Rs. 0 -10 Lacs, Rs. 10 -25 lacs and Rs. 25-50 lacs for the Financial year 2014-2015. The service tax returns will be selected on the basis of various risk parameters and risk tools.
Nobody fears the scrutiny until it leads to harassment of a person. The department should concentrate more on online scrutiny and use technology instead of wasting the precious time of a businessman in scrutiny cases. The revenue collection from service tax increased tremendously in last few years. Government should work on providing more facilities to the tax payers instead of putting checks which are hinders for doing business in India.