study circle reference material-ca payal (prerana) shah-10 02 2015

Notifications & Circulars issued during Financial Year 2014-2015

under Service tax Laws

on 10 th February, 2015

Chairman: Ca Naresh Sheth

Group leader: Ca Payal (Prerana) Shah

Compilation prepared by: Ca Payal (Prerana) Shah

Preamble:

The presentation covers notification/circulars/instructions issued from April, 2014 to January, 2015.

The presentation does not cover administrative notifications /circulars. The presentation does not cover notification/circulars relating to Finance Bill/Act,

2014. The presentation provides understanding of the compiler on Notifications, Orders,

Circulars or Instructions as on the date. The complier has restricted herself to Service tax Laws only. Therefore, in cases

where Notifications, Orders, Circulars or Instructions covered more than one law, the provisions relevant to Service tax Laws are only discussed.

I. TAXABILITY

1.1. Joint Venture viz-a-viz Service tax

Earlier, Circular No. 148/17/2011-ST dated 13th December, 2011 and Circular No.

151/12/2012-ST dated 10th February, 2012 discussed Service tax implications in case of Joint

Venture (JV) and it was clarified that only in case of revenue sharing on principal-to-principal

basis, Service tax is not attracted. Further, as per Explanation 3 (a) to Section 65B (44) of the

Finance Act, 1994, an unincorporated association or BOP and its members shall be treated

as distinct persons. Consequently, taxable services provided for consideration, by the JV to

its members or vice versa and between the members of the JV, are leviable to Service tax.

Now, recently, Circular is issued to further clarify Service tax implications in case of Joint

Venture as under:

Recent Notifications and Circulars issued in Financial Year 2014-2015 under Service tax Laws

Cash calls, being capital contributions, made by members of JV to JV shall be critically

examined. If cash calls are merely a transaction in money, no Service tax shall be

levied vide Section 65B (44) of the Finance Act, 1994. Whether a cash call is merely a

transaction in money or is a consideration, would depend on the terms of Joint

Venture Agreement.

Detailed and closed scrutiny of the terms of JV Agreement needs to be carried out in

each case, to determine leviability of Service tax on cash calls. Following examples

are provided by CBEC:

o Taxable service provided by JV to its members:

Sometimes Cash calls could be in the nature of advance payments

made by members towards taxable services to be received from JV.

For instance, JV receiving the cash call may, in return, agree to do

something of direct benefit either to the member or on the behest of

a member to a third party, such as granting of right, reserving

production capacity or providing an option on future supplies.

Taxable services received by a JV from its members or third party:

If JV is making payments out of pooled cash calls to a member or a

third party towards taxable services, the same would take colour of

“consideration” and therefore, Service tax would be applicable.

o Taxable services provided by members to JV:

Customarily, responsibility of managing the cash calls of JV is assigned

to member/s by way of a contractual agreement. In such a case, if the

member/s receives a consideration for the same either in cash or

kind, it is a taxable service.

A member of JV may provide support services such as administrative

service in the form of setting up/management of a project office/site

office to the JV for a consideration either in cash or kind.

(Circular No. 179/5/2014-ST dated 24th September, 2014)

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1.2. Change in rate of exchange for Service tax Laws with effect from 1st October, 2014

Hitherto, for determining value of taxable services, rate of exchange as prevailing under

Customs Laws was to be considered vide Section 67A of the Finance Act, 1994. Vide Union

Budget 2014-2015, the rate of exchange has to be adopted as per prescribed rules. The said

amendment is effective from 1st October, 2014 and as per the said amendment, Rule 11 has

been introduced under Service tax Rules, 1994 with effect from 1st October, 2014 which

reads as under:

“11. Determination of rate of exchange. - The rate of exchange for determination of value

of taxable service shall be the applicable rate of exchange as per the generally accepted

accounting principles on the date when point of taxation arises in terms of the Point of

Taxation Rules, 2011.”

Further, CBEC or the Chief Commissioners of Central Excise are now empowered to issue

instructions for any incidental or supplemental matters for the implementation of the

provisions of the Finance Act, 1994.

(Notification No. 19/2014-ST dated 25th August, 2014)

1.3. Levy of Service tax on activities involved in relation to inward remittances from

abroad to beneficiaries in India through MTSOs

Circular No. 163/14/2012–ST dated 10th July, 2012 clarified that in case of inward

remittances, no Service tax is leviable on inward remittances since the transaction is in

money, specifically excluded from the definition of service. Further, Service tax is not

leviable on conversion charges post negative list of services regime since person sending

money and Company conducting remittances are located outside India. Further, in such a

case, Indian bank or financial institution provide services to the foreign bank or any other

entity. Since such services are provided on principal to principal basis, the place of provision

of such services is location of service recipient i.e. outside Indian territory, not leviable to

Service tax vide Rule 3 of Place of Provision of Services Rules, 2012 (PPSR).

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However, CBEC has subsequently noticed that Foreign Money Transfer Service Operator

(MTSO), providing services to a beneficiary in India, appoints Indian bank/s/financial

institution/s as their agents in India who are given commission/fees for such

agency/representational services. These Indian bank/s/financial institution/s also appoints

sub-agents sometimes to provide services to MTSO. Further, Indian bank/s/financial

institution/s or sub-agents may also charge fees from Indian beneficiary. The issue under

consideration is, whether these Indian bank/s/financial institution/s are covered within the

definition of ‘intermediary’ covered under Rule 9 of PPSR.

Accordingly, in light of these new facts, the said Circular is rescinded and following

clarifications are issued:

Issues Clarification

Whether service tax is payable on remittance

received in India from abroad?

No service tax is payable per se on the

amount of foreign currency remitted to

India from overseas. As the remittance

comprises money, it does not in itself

constitute any service in terms of the

definition of ‘service’ vide Section 65B (44)

of the Finance Act, 1994.

Whether the service of an agent or the

representation service provided by an Indian

entity/bank to MTSO in relation to money

transfer falls within the category of

intermediary service?

Yes. The Indian bank or other entity acting

as an agent to MTSO in relation to

money transfer facilitates in delivery of

remittance to the beneficiary in India i.e.

these Indian entities/bank/s facilitate the

provision of Money transfer Service by

MTSO to a beneficiary in India which is

covered within the definition of

intermediary as defined in Rule 2 (f) of

PPSR.

Whether Service tax is leviable on the service

provided by an intermediary/agent located in

Vide Rule 9 (c) of PPSR, in the present

case, the place of provision of service is

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India to MTSOs located outside India? the location of service provider i.e. India

and accordingly, Service tax is payable on

commission or fees charged by such

agent/s.

Whether Service tax would apply on the

amount charged separately, if any, by the

Indian bank/entity/agent/sub-agent from the

person who receives remittance in the

taxable territory, for the service provided by

such Indian bank/entity/agent/sub-agent?

Yes. As the service is provided by Indian

bank/entity/agent/sub-agent to a person

located in taxable territory, the place of

provision of such services is in the taxable

territory. Accordingly, Service tax is

payable on such amount charged

separately, if any.

Whether Service tax would apply on the

services provided by way of currency

conversion by a bank /entity located in India

to the recipient of remittance in India?

Any activity of money changing comprises

an independent taxable activity.

Therefore, Service tax applies on currency

conversion in such cases in terms of the

Service Tax (Determination of Value)

Rules. Service provider has an option to

pay Service tax at prescribed rates in

terms of Rule 6 (7B) of the Service Tax

Rules, 1994.

Whether services provided by sub-agents to

such Indian Bank/entity located in the taxable

territory in relation to money transfer is

leviable to service tax?

Sub-agents also fall in the category of

intermediary. Therefore, Service tax is

payable on commission received by sub-

agents from Indian bank/entity.

(Circular No. 180/06/2014–ST dated 14th October, 2014)

II. EXEMPTION

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1.4. Exemption to specified organizations for services in respect of specified religious

Pilgrimages

Vide Mega Exemption Notification; Notification No. 25/2012-ST dated 20th June, 2012,

various exemptions are provided to specified services. The exemption is based on nature of

services, its usage, type of service receiver etc. Now, a new exemption is inserted with

respect to religious pilgrimage with effect from 20th August, 2014. Accordingly, services

provided by Kumaon Mandal Vikas Nigam Limited, a Government of Uttarakhand

Undertaking and “Committee” or “State Committee” defined under Section 2 of the Haj

Committee Act, 2002, in respect of a religious pilgrimage facilitated by the Ministry of

External Affairs of the Government of India, under bilateral arrangement, are granted full

exemption from Service tax levy.

(Notification No. 17/2014-ST dated 20th August, 2014)

III. CENVAT CREDIT

1.5. Availment of Cenvat Credit after 6 months with respect of re-credited Cenvat Credit

In following circumstances the assessee avails Cenvat Credit, reverses the same and takes

re-credit of Cenvat Credit:

In case of prospective charge and partial reverse charge mechanism, if the value of

input service and Service tax payable, is not paid within 3 months from the date of

invoice, bill or challan, Cenvat Credit availed needs to be reversed. Subsequently, on

payment of value of input service and Service tax, Cenvat Credit reversed is available

in the form of re-credited (3rd proviso to Rule 4(7) of Cenvat Credit Rules, 2004 (CCR,

2004)).

If the value of inputs is written off or a provision is made in books of accounts to

write off the value, fully or partially, the service provider has to reverse Cenvat Credit

availed. However, if the inputs are subsequently used for provision of output

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services, re-credit of reversed Cenvat Credit is available (Proviso to Section 3(5B) of

CCR, 2004).

If inputs, as such or after being partially processed, are sent to a job worker for

further processing, testing, repair, re-conditioning or any other purpose and the

same are not received back within 180 days from the date of sending the inputs to

the job worker, Cenvat Credit needs to be reversed. Once inputs are received back in

the premises of output service provider, re-credit of Cenvat Credit is available (Rule

4(5)(a) of CCR, 2004).

Through Union Budget 2014-2015, time limit is introduced for availment of Cenvat Credit.

With effect from 1st September, 2014, the output service provider shall take Cenvat Credit

on inputs and input services within 6 months from the date of issue of documents specified

in Rule 9 (1) of CCR, 2004 vide Rule 4 (1) and Rule 4 (7) of CCR, 2004. There was a concern

whether in cases of re-credits enumerated above, whether the time limit of 6 months would

apply or not. If the time limit would apply, whether it would apply from the date of actual

credit or re-credit.

Now, the Board has clarified that the purpose of amendment was to inculcate discipline

amongst the assessees while taking Cenvat Credit. Therefore, limitation of 6 months would

apply only when Cenvat Credit is taken for the first time and it would not apply on cases

of re-credit of Cenvat credit reversed earlier provided the conditions prescribed in the said

rules are fulfilled.

(Circular No. 990/14/2014-CX-8 dated 19th November, 2014)

1.6. Chief Commissioner may pass order to impose restrictions to prevent misuse of

provisions of Cenvat Credit even for output service providers

Vide Rule 12AAA of CCR, 2004 if Central Government is of the opinion that to prevent

misuse of provisions of Cenvat Credit, certain measures including restrictions needs to be

taken, it may issue a notification specifying nature of restrictions, suspension of registration,

types of facilities to be withdrawn and procedure for issue of order by authorized Officers.

Now, the said Rule is amended as under:

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“12AAA. Power to impose restrictions in certain types of cases. — Notwithstanding anything

contained in these rules, where the Central Government, having regard to the extent of

misuse of CENVAT credit, nature and type of such misuse and such other factors as may be

relevant, is of the opinion that in order to prevent the misuse of the provisions of CENVAT

credit as specified in these rules, it is necessary in the public interest to provide for certain

measures including restrictions on a manufacturer, first stage and second stage dealer,

provider of taxable service 1 or an exporter, may by a notification in the Official Gazette,

specify the nature of restrictions including restrictions on utilization of CENVAT credit and

suspension of registration in case of a dealer and type of facilities to be withdrawn and

procedure for issue of such order by an officer authorized by the Board the Chief

Commissioner of Central Excise.

Explanation. - For the purposes of this rule, it is hereby clarified that every proposal

initiated in terms of the procedure specified under notification no. 5/2012-C.E. (N.T.) dated

the 12 th March, 2012 published in the Gazette of India, Part II, Section 3, Sub-section (i)

vide number G.S.R. 140(E), dated the 12th March, 2012, which is pending, shall be treated

as initiated in terms of the procedure specified under this rule and shall be decided

accordingly. 2 ”

Accordingly, now, Rule 12AAA is applicable to output service provider and the order for such

restrictions has to be passed by the Chief Commissioner of Central Excise as against

authorized Officer. Further, by way of insertion of explanation, it is clarified that pending

proposals under Notification No. 5/2012-CE (NT) dated 12th March, 2012 shall be treated as

initiated in terms of procedures specified in Rule 12AAA of CCR, 2004 and shall be decided

accordingly.

(Notification No. 15/2014-CE (NT) dated 21st March, 2014 and Notification No. 25/2014-CE (NT) dated 25th August, 2014)

1.7. Service tax Certificate issued by Indian Railways to be eligible document for

availment of Cenvat Credit

1 Inserted with effect from 25th August, 2014

2 Deleted and inserted with effect from 21st March, 2014

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Rule 9 (1) of Cenvat Credit Rules, 2004 provides for eligible documents to avail Cenvat

Credit. Now, Service Tax Certificate issued by the Indian Railways for transportation of

goods by Rail (STTG Certificate) along with photocopies of railway receipts mentioned in

such STTG certificate is also specified as eligible document for availment of Cenvat Credit.

(Notification No. 26/2014-CE (NT) dated 27th August, 2014)

1.8. Cenvat Credit on Tower Parts & Pre-fabricated Buildings used by Cellular Mobile

Service Providers

CBEC drawn attention for compliance to the decision delivered by Bombay High Court in the

case of M/s. Bharti Airtel Ltd. v. CCE, Pune-III (2014 (35) S.T.R. 865 (Bom.)). Relying on the

decision of Hon’ble Supreme Court in the case of Saraswati Sugar Mills v. CCE Delhi, (2011

(270) ELT 465), the Hon’ble Bombay High Court observed that the subject items were

neither capital goods under Rule 2 (a) nor inputs under Rule 2(k) of CCR, 2004 and

therefore, it was held that Cenvat credit on Tower Parts & Pre-fabricated buildings was not

available to Cellular Mobile Service Provider.

(Instruction No. 267/60/2014-CX dated 11th November, 2014)

IV. PROCEDURAL

1.9. Clarification on amendment in appeal provisions in Customs, Central Excise and

Service tax

Vide Finance Act, 2014, pre-deposit was made mandatory in case of filing appeals at first

and second appellate level. Since there were confusions with respect to the said

amendment, department has issued one circular clarifying following aspects:

Quantum of pre-deposits for appeals made against order of Commissioner (Appeals):

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o It has been clarified that 10% of duty or penalty imposed by the

Commissioner (Appeals) would be the quantum of pre-deposit which may

differ from duty demanded or penalty imposed in Order-in-Original.

o In cases where appeals are filed against penalty alone, pre-deposit would be

calculated based on aggregate of all penalties imposed in the order against

which appeal is proposed to be filed.

o In case of failure to pay requisite pre-deposits, appeal is liable for rejection.

Payment during investigation:

o Out of the total amount paid during the course of investigation or audit, prior

to the date of filling appeal, amounts paid to the extent of 7.5% or 10%,

subject to the ceiling limit of Rs 10 crores, may be considered to be pre-

deposit. Additional amounts paid, if any, will not be considered as pre-

deposit.

o Payments made in the course of investigation or audit will take colour of pre-

deposit only when appeal is filed and therefore, the date of filling appeal shall

be deemed to be the date of deposit made.

o In case of failure to pay requisite pre-deposits, appeal is liable for rejection.

Recovery of amounts during pendency of appeal:

o Circular No. 967/1/2013 issued by the department on 1st January, 2013

regarding recovery of amounts due to the Government, will not apply to the

appeals filed after amendment of the provisions relating to pre-deposit.

o No coercive measures shall be taken by the departmental authorities for

recovery of balance amount over and above pre-deposit during pendency of

appeal provided the assessee produces proof of payment of pre-deposit and

copy of appeal memo filed.

o Recovery action can be initiated only when the decision is in the favour of the

department and higher judicial forum has not granted stay. Recovery would

include interest amount as well from the date duty became payable till the

date of payment.

Refund of pre-deposit:

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o If the appeal is decided in favour of assessee, pre-deposit needs to be

refunded. Refund, not being of duty but of pre-deposit which is not payment

of duty, is not governed by Section 11B of Central Excise Act, 1944.

Accordingly, refund along with interest shall be paid to the appellant within

15 days of receipt of letter of appellant seeking refund irrespective of

whether the department is proposing to challenge the order of appellate

authority.

o If department contemplates appeal against appellate authority’s order,

refund with interest is payable unless stayed by appellate authority.

o In the event of remand, refund shall be payable along with interest.

o In cases where demand is confirmed partially, pre-deposit amount to be

adjusted with the duty confirmed along with interest.

Procedure and manner of making pre-deposit:

o E-payment facility may be used by appellants.

o Self-attested copy of proof of payment of pre-deposit to be submitted before

the appellate authority and the information of payment has to be provided in

respective forms of appeals which shall be verified before registering the

appeal.

o Copy of appeal memo with proof of payment of pre-deposit shall be filed

with jurisdictional officers.

Procedure for refund:

o A simple letter, from appellant requesting for return of such amount with

self-attested copies of order-in-appeal or CESTAT Order and proof of

payment of pre-deposit, to be filed with jurisdictional Assistant

Commissioner/Deputy Commissioner for claiming refund with interest.

o Record of pre-deposits made to be maintained by Commissionerate to

facilitate seamless verification of pre-deposits at the time of processing

refund claims.

Amendment to Preamble of Orders:

o Consequent to amendment in provisions of pre-deposits, pre-amble of the

orders to be amended.

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(Circular No. 984/08/2014-CX dated 16th September, 2014)

1.10. Mandatory Pre-deposit

Vide above Circular, the Commissionerates are required to maintain a database of pre-

deposits to facilitate seamless verification of pre-deposits at the time of processing refund claims.

Accordingly, following columns are suggested to be maintained in a register (e-register preferably)

in Review Cell of each Commissionerate separately for Appeals before Commissioner (Appeals) and

CESTAT:

Sr. No.

Name of the Appellant

Details of duty paying document viz Challan etc.

Amount of pre-deposit paid

Order No. & Date of Commissioner (Appeals) Order/Tribunal.

Further, a copy of the appeal memo should be sent immediately to the Commissionerate by

the Tribunal registry where appeal memo is received vide Rule 17 of the CESTAT (Procedure)

Rules, 1982. In case of appeal before Commissioner (Appeals), appeal memo should be sent

to the Commissionerate concerned by the office of the Commissioner (Appeals).

(Circular No. 993/17/2014-CX dated 5th January, 2015)

1.11. Issue of Summons under Service tax Laws

It was noticed by CBEC that summons under Section 14 of the Central Excise Act, 1944 are

issued to top senior officials of assessees in a routine manner to call for material evidence/

documents or enforce recovery of disputed dues. Referring to its earlier Circular No.

137/39/2007-CX.4 dated 26th February, 2007, CBEC issued following guidelines:

Purpose of Summons

Summons can be used in an inquiry for recording statements or for collecting

evidence/ documents only vide Section 14 of the Central Excise Act, 944. Further, it

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has been emphasized that the summons should be issued only as a last resort when

it is absolutely required.

Prior permission for Summons issued by Superintendents

Superintendents should issue Summons after obtaining prior written permission

from an officer not below the rank of Assistant Commissioner with the reasons for

issuance of summons to be recorded in writing. In case of failure to do so for

operational reasons, oral/telephonic permission from such officer must be obtained

and the same should be reduced to writing and intimated to the concerned officer at

the earliest.

Submission of Report

In all cases, where summons are issued, the officer issuing summons should submit a

report or should record a brief of the proceedings in the case file and submit the

same to the officer who had authorised the issue of summons.

Importance of Summons

Senior management officials such as CEO, CFO, General Managers of a large

company or a PSU should not, generally, be issued summons at the first instance.

They should be summoned only when there are indications in the investigation of

their involvement in the decision making process which led to loss of revenue.

(Circular No. 207/07/2014-CX-6 dated 20th January, 2015)

1.12. Adjudication Proceedings – Judicial Discipline

Gujarat High Court in case of E.I. Dupont India Pvt. Ltd. 2014 (305) E.L.T. 282 (Guj.) has

observed that in spite of binding precedent judgment, the same was not followed. Further,

there was Circular No. 695/11/2003-CX., dated 24th February, 2003 on the subject of

consequential refund, binding department which also could have avoided unnecessary

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litigation. Accordingly, this circular is once again brought to the notice of field officers with

direction that it should be followed scrupulously.

CBEC stated that Hon’ble Supreme Court’s decision in case of Union of India v. Kamlakshi

Finance Corporation Ltd. 1991 (55) E.L.T. 433 (S.C.) may also be perused since that was an

authoritative pronouncement on the issue and was also cited by the Hon’ble High Court.

(Instruction No. 201/01/2014-CX dated 26th June, 2014)

1.13. Audits by Central Excise Officers

Hon’ble Delhi High Court in the case of M/s Travelite (India) [2014-TIOL-1304-HC-DEL-ST]

had quashed Rule 5A (2) of the Service Tax Rules, 1994 on the ground that the powers, to

conduct audit envisaged in the rule, did not have appropriate statutory backing.

It may be noted that under Central Excise Laws, there is adequate statutory backing for

conducting audit by Central Excise Officers vide Section 37 (2) (x) and Section 37 (1) of the

Central Excise Act, 1944 and Rule 22 of the Central Excise Rules, 2002. However, there was

no such provisions under Service tax Laws. Therefore, Central Government has amended

Rule 5A (2) of Service Tax Rules, 1994 with effect from 5th December, 2014 as under:

“Rule 5A. Access to a registered premises. — …

(2) Every assessee shall, on demand, make available to the officer authorised empowered

under sub-rule (1) or the audit party deputed by the Commissioner or the Comptroller and

Auditor General of India, or a cost accountant or chartered accountant nominated under

section 72A of the Finance Act, 1994, - within a reasonable time not exceeding fifteen

working days from the day when such demand is made, or such further period as may be

allowed by such officer or the audit party, as the case may be, -

(i) the records as mentioned in maintained or prepared by him in terms of sub-rule (2)

of rule 5;

(ii) trial balance or its equivalent the cost audit reports, if any, under section 148 of the

Companies Act, 2013 (18 of 2013); and

(iii) the income-tax audit report, if any, under section 44AB of the Income-tax Act, 1961

(43 of 1961), for the scrutiny of the officer or audit party, or the cost accountant or

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chartered accountant, within the time limit specified by the said officer or the audit party

or the cost accountant or chartered accountant, as the case may be.”.

On analysing the above Rules, it is observed that following amendment have been made:

Till now, the assessee was supposed to provide requisite documentation to Service

tax Officers, audit party and Comptroller and Auditor General of India. Now, such

documentation needs to be provided to cost accountant or chartered accountant

nominated under Section 72A of the Finance Act, 1994 as well.

Trial balance was included in the list of documents to be made available by the

assessee, which is now replaced by Cost Audit Report.

The time limit to submit the documents was 15 working days and the same could be

extended by Service tax Officers. Now, the time limit would be specified by such

Service tax officer or cost accountant or chartered accountant.

Further, CBEC has clarified that vide Section 94 (2) (k) incorporated with effect from 6 th

August, 2014, amendment made to Rule 5A (2) of Service tax Rules, 1994 is having a

statutory legal backing and the decision delivered in Travelite (India) (Supra), can be

distinguished. It was further clarified that the word “verified” used in the said Section is of

wide import and would include, within its scope, audit by departmental officers. Therefore,

CBEC directed Departmental Officers to carry out audits of Service tax assessees.

(Notification No. 23/2014-ST dated 5th December, 2014 read with Circular No. 181/7/2014-ST dated 10th December, 2014)

1.14. Interest on Pre-deposit

Section 35FF of the Central Excise Act, 1994 provides for interest on delayed refunds. Till

now, interest on pre-deposits was required to be paid @ 6% (Vide Section 11B of the Central

Excise Act, 1944) after expiry of 3 months from the date of communication of order till the

date of refund. Now, interest would be payable, at a notified rate which may range between

5% to 36%, for the period from the date of payment of pre-deposit till the date of refund.

Rate of interest is notified to be 6% vide Section 35FF of the Central Excise Act, 1944 read

with Notification No. 24/2014-CE (NT) dated 12th August, 2014.

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The pre-deposits made prior to 6th August, 2014 under Section 35F of the Central Excise Act,

1944 would continue to be governed by the earlier provisions of Section 35FF of the Central

Excise Act, 1944.

(Notification No. 24/2014-CE (NT) dated 12th August, 2014 read with Section 106 of the

Finance Act, 2014)

1.15. Action Plan to evolve non-adversarial indirect tax administration

In view of attaining one of the key objectives of the Department; viz; to foster non-

adversarial tax administration, initiatives have been taken to simplify procedures to reduce

interface between the tax officials and the taxpayers as under:

Punctuality

Officers are advised to maintain the appointed time as indicated in the

communications regarding personal hearing/trade meetings etc. with the taxpayers.

Further, there should be adequate gap between two meetings to avoid undue delay

in the subsequent meeting.

Prompt acknowledgement of all letters/complaints/references

All references/communications received from the trade should be quickly

acknowledged and a centralised computerized system for receipt/dispatch of dak

may be developed to monitor the status.

Priority processing of representations/communications received from taxpayers

CBEC has a mission to administer indirect taxes collection by creating a positive

environment for voluntary compliance and by providing suitable guidance to

taxpayers. Therefore, all communications received from the trade seeking

clarifications should be attended instantly.

Regular interaction with the trade

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As per Board’s instructions, various meetings of Regional Advisory Committee/Public

Grievance Committee/Permanent Trade Facilitation Committee/Open House etc.,

chaired by the Chief Commissioner/Commissioner, are to be held by the concerned

Zones/Commissionerates on a regular basis. The departmental officers should

encourage assessees to participate in these meetings for tangible outcomes.

Sevottam compliant formations may ensure strict adherence to the timeframes indicated in

the standards of service delivery. The other field formations which are in the process of

certification are advised to implement the standards immediately without awaiting BIS

certification.

Further, the Board is in the process of undertaking following measures:

Simplifying Registration process to eliminate the need for assessee’s physical visit to

Department

Facilitating online Refund/Rebate credits

Easing of Compliance verification norms.

(Instruction No. 296/165/2014-CX dated 30th September, 2014)

1.16. Initiatives towards good governance

In order to achieve excellence in the formulation and implementation of Customs, Central

Excise and Service Tax policies and enforcement of cross border controls for the benefit of

trade, industry and other stakeholders. It is reiterated that the indirect tax administration

considers all taxpayers, the cornerstone of economic independence and prosperity. In order

to further simplify and modernize the tax system, expand the tax base and improve

compliance in tandem with the Central Government's objective to ensure good governance,

it has been decided that every Wednesday from 9 AM to 1 PM would be “Taxpayers' day”

wherein Heads of all offices will meet the taxpayers without any prior appointment to

address their grievances expeditiously.

(Instruction No. 296/267/2014-CX dated 7th January, 2015)

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1.17. Guidelines regarding structure, administrative set up and functions of audit

Commissionerates

On implementation of cadre review there would be 23 Central Excise Zones and 4 Service

Tax Zones with each zone having one or more Audit Commissionerates. Each Audit

Commissionerate would cover assessees registered under the jurisdiction of 3 to 5 Executive

Commissionerates. Principal Chief Commissioner and Chief Commissioner shall assign the

jurisdiction of Audit Commissioner in the Zone, decide the location of Audit

Commissionerates and its subordinate offices. Accordingly, certain guidelines are issued

which needs to be followed while finalizing the location and organizational structure of

Audit Commissionerate and its subordinate offices. The broad areas covered under the said

guidelines are:

Location of Audit Commissionerates

Configuration of Audit Commissionerates

Organisation structure of Audit Commissionerates

Staffing norms

Functions of Audit Commissionerates

Transfer policy and capacity building etc.

Accordingly, past guidelines and instructions on the subject stands modified to the extent

they are in conflict with these guidelines. Principal Chief Commissioners and Chief

Commissioners are authorised to issue appropriate temporary instructions to remove

difficulty in setting up and operationalizing Audit Commissionerates, if there is any difficulty

in implementing these guidelines. Issues to be addressed in the Board may be forwarded to

the Director General of Audit with suggestions.

(Circular No. 985/09/2014-CX dated 22nd September, 2014)

1.18. Extension of due date for filing Service tax Return of April, 2014 to September, 2014

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Having regard to the natural calamities in certain parts of the County, the due date for filing

Service tax return for the period from 1st April, 2014 to 30th September, 2014 has been

extended from 25th October, 2014 to 14th November, 2014.

(Order No. 2/2014-ST dated 24th October, 2014)

10.02.2015 of 19

study circle reference material-ca payal (prerana) shah-10 02 2015

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