ddddwdd

1. Page 1 of 4
‘PRACTICAL ASPECTS OF FILLING & FILING SERVICE TAX RETURN’
By CA Narayan Kr.Agarwal; FCA
1. Statutory Provisions [Section 70 & Rule 7]
1.1 Category of Persons Required to File Service Tax Returns
 All Registered Service Providers liable to pay service tax ;
 Persons Liable to Pay Service Tax As Recepient of Service
 Input Service Distributor
1.2 Form & Frequency
 Returns Are To Be Filed in ST-3 Form
 Returns To Be Filed Half Yearly
1.3 Due Date For Filing of Returns
 Return is to be filed by 25th of the month following the particular half year. The due
date for filing of ST-3 return for the period April, 2014 to Sept, 2014 is 25th October,
2014.
 If last date of filing return is a bank holiday, then it can be submitted on the next
working day.
1.4 Mode of Filing Return
The assessees can electronically file statutory returns of Service Tax by choosing one of the
two facilities being offered by the department at present through ACES:
 Either file it online, or
 Download the off-line return utilities which can be filled up off-line and uploaded to
the system through the internet.
1.5 Late Fee & Penalty [Section 70 & Rule 7C]
 Where returns are filed after the due date, late fee is payable for delayed filing of
return. The late fees is payable as follows:
Number of Days of delay Late Fee Payable
Delay up to 15 days Rs.500/-
Delay beyond 15 days and upto 30
days
Rs.1000/-
Delay beyond 30 days
Rs.1000/- plus Rs.100 per day of delay beyond 30
days subject to maximum Rs. 20000/- per return

2. Page 2 of 4
 If service tax return is not filed within the prescribed period, penalty is leviable under
Section 77(2), which can be upto Rs. 10000/-. However, if late fee is paid, penalty will
not be imposed.
2. RETURN FILING THROUGH ACES
 ACES (Automation of Central Excise and Service Tax), is a centralised web based
software application which automates various processes of Central Excise & Service Tax for
assessees and department.
 ST-3 returns, both through online and offline utility are filed through ACES
 Further, it has been clarified that wherever the returns are submitted through ACES
there will not be any requirement to submit signed hard copy separately.
 System Requirements:
 Processor: Intel Pentium III or higher
 RAM: 256 MB or higher
 HDD: 80 GB or more
 Web Browser: Internet Explorer 6.0 or above
 Microsoft office Excel 2003 & above
 File Compression software to unzip excel utility file
 System Date should be correct
 ACES Certified Facilitation Centres (CFCs)
CBEC has entered into MOUs with the ICAI, ICWAI & ICSI for setting up ACES CFCs,
details of which are available under the CFC link in ACES website These CFCs provide a
host of services to the assessees. Assessee can file the return through CFC also.
3. ONLINE PREPARATION AND SUBMISSION OF ST-3 RETURN
 Returns can be prepared and filed online by selecting the “File Return” option under
RET module after logging into the ACES.
 All validations are thrown up during the preparation of the return in this mode and the
status of the return filed using the online mode is instantly shown by ACES.
 In the case of a Service Tax return filed on-line, ACES application software
acknowledges it by displaying an Acknowledgement message. This is also automatically
communicated to the email id of the assessee by the application.
4. OFFLINE PREPARATION BY DOWNLOADING RETURN UTILITIES
 Returns can also be prepared and filed off-line. Assessee can download the Offline
return preparation utility available at http://www.aces.gov.in (Under Download)
 Assessee can prepare the return offline using this utility. The return preparation utility
contains preliminary validations which are thrown up by the utility from time to time.

3. Page 3 of 4
 After all the required fields have been filled properly and validated, “Validate Return and
Submit” button will recheck all the sheets and XML will be generated. Both files will be
saved in the same folder of your system where e-filing utility is placed.
 Then the assessee will have to log in using the User ID and password.
 Then the assessee shall Select RET from the main menu and upload the generated XML
file of return. On upload screen provide the required information and browse to select
the XML file and submit the form.
 The status can be viewed by the assessees under the “VIEW STATUS” link under “RET”
module. Status is described as :-
 UPLOADED:- Return is uploaded and under processing.
 FILED:- Uploaded return is accepted by system.
 REJECTED:-Return is rejected due to errors. (The assessees are required to
correct the return and upload it again.)
5. COMMON ERRORS WHILE FILING RETURNS
 The error message "The login Information is wrong. Please try again. Your password will
be blocked after 5 attempts" appears when user is not entering his/her user-name or
password correctly. In such cases it is suggested that the user should contact his/her
Range Officer to have the password regenerated.
 The Error message “you are not a valid migrated user” appears when your assessee
registration details are not properly migrated into ACES from the existing database.
Assessee should approach the Range Officer on this or lodge a complaint with Service
Desk.
 If error message “Content Management Server is down” appears, you should try after
some time and lodge a complaint with Service Desk.
 Mismatch in the selection of return type (original/revised) in excel utility and that
selected at the time of uploading the return. This will lead to rejection of the return.
 Wrong rates of tax entered in the offline utility may lead to rejection of the return.
 Incorrect registration number or wrong selection of constitution or wrong category of
registrant will lead to rejection of return.
 Amount entered in the return for a given challan higher than the amount actually
deposited against the said challan will lead to rejection of return.
 Difference in the amount shown as paid by CENVAT in Paid Section and that entered in
the CENVAT section will lead to return not being validated.
 Amount shown as paid in cash higher than the amounts mentioned in the challan will
throw an error while validating the return utility.

4. Page 4 of 4
 Service tax payable higher than amount shown in paid section even of Re. 1 (arising
mainly due to rounding off differences) will throw an error while validating the return
utility.
 Return cannot be filed online if there is a change/addition in the category of service
provided but there is no time left to amend registration before filing the return.
6. NIL RETURN
 As per Section 70, person liable to pay service tax is required to file returns.
 If there is no liability to pay service tax, there is no need to file service tax return even if
the assessee has service tax registration.
 View is also confirmed by the CBEC clarification vide para 6.1 of Circular No. 97/8/2007
dated 23rd August, 2007 where CBEC clarified that “Persons who are not liable to
pay service tax (because of an exemption including turnover based
exemption), are not required to file ST-3 return”. However, in Para 4.8 of FAQs
released by CBEC in November 2007, it was said that even if there was no business
during the period, assessee will have to file ‘Nil’ return as long as registration certificate
is valid.
 Still it is advisable to file Nil Returns to avoid dispute and demand of late fee by the
department later. However, even if nil return is filed late, there is no need to pay late fee
on that. View confirmed in various judgements:
 Amrapali Barter Pvt. Ltd. vs. Commissioner Of Service Tax, Kolkata
[2013 (32) S.T.R. 456 (Tri. - Kolkata)]
 Suchak Marketing Pvt. Ltd. Commr. Of Service Tax, Kolkata [2013 (30)
S.T.R. 593 (Tri. - Kolkata)]
7. REVISED RETURN [RULE 7B]
 The assessees are allowed to rectify the mistakes and file revised return within 90 days
from the date of filing of the original return.
 If mistake comes to notice after 90 days, there is no provision for submission of
revised return after 90 days.
 If some short payment is noticed, assessee should make payment of the same
inform the department.
 If some excess payment is made, the assessee will have to file refund claim except
in cases where self-adjustment is permissible.
 If cenvat credit has not been taken on certain inputs, input services, capital goods,
it can be availed in the subsequent period provided that it has been availed within
6 months.