Annual Returns under Service Tax (Finance Act

1994)
The Finance Act 2016 has made annual service tax return filing mandatory by
30th November of the financial year ending on 31 st March. This provision shall be
applicable from Financial Year 2015-16 i.e first annual return shall be filed on 30 th
November 2016. The basic purpose of introducing the annual return is to reconcile
the information disclosed in the half yearly service tax returns and the audited
annual financial statements of the assessee for the financial year ending on 31 st
March.
It was usually seen that the department was facing problems in reconciling
the figures mentioned in the audited profit and loss account and the service tax
returns filed by the assessee. Since the last date for filing of service tax return for
the half year ending 31st March is 25th April and for financial statements is 30 th
September, usually some differences were found between them In such a scenario
where the adjustments are made in the audited financial statements, the
department failed to assess the real service tax liability. In order to remove such
confusion, the law has been amended to provide for submission of annual returns by
30th November. Effectively 2 months have been provided after the finalization of
audited balance sheet.
Annual Return under Service Tax is not a new concept. It has been adopted from
the Central Excise Law where an annual return is presently filed by the assessee. It
is merely a certified reconciliation statement by the chartered accountant where the
figures shown in the financial statements and the service tax returns shall be
reconciled. CA would certify reasons for the difference between the two figures. The
usual reasons for the difference between the figures could arise due to:
1.
2.
3.
4.
5.

Point of Taxation Rules 2011

Place of Provision Rules
Cenvat Credit Rules, 2004
Any new/amendment to Notifications under Service Tax Law
Provisions and adjustments in the financial statements.

The department has not yet certified a particular format for the annual return,
but as per the studies we have made the format would be more or less in the shape
of reconciliation statement to be certified by a practicing Chartered Accountants.
The onus of such certification shall lie upon the Chartered Accountant and
he/she may be held party in default for suppression of facts or faulty reconciliation.
Although it may prove to be opportunity for the professionals but at the same time
it is to be ensured that thorough study of the provisions should be done in order to
prepare true and correct reconciliation statement.
For any further queries do contact the undersigned.
Regards
Keshav R Garg
(B.Com, CA, CS, ISA(ICAI))
3328, Sector 27 D, Chandigarh, India 160 019

Ph: +91-172-461-3328
+91-172-265-3338
Mob: +91-98880-90008
Mail: mygst.mytax@gmail.com