Trade Notice No. 1/2008 Dated: 4/1/08

Subject: Ministry’s Notification No.45 /2007- Service Tax dated 28.12.07 Board’s Circular F. No. 137/26/2007-CX.4 dated 01.01.2008 - communication of – reg.

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Notification No. 45/2007 Service Tax dated 28.12.2007 issued by the Ministry of Finance is communicated herewith for information and necessary action.

The notification amends Rule 5 of Service Tax Rules 1994 and inserts a new Rule 5A to the said Rules.

Similarly, Board’s Circular F. No. 137/26/2007-CX.4 dated 01.01.2008 reg. maintenance and furnishing of records explains the amendment made vide the abovesaid Notification.

All the Trade associations are requested to bring the contents of the Trade Notice to the attention of their members, in particular, and the trade and all other concerned in general.

[Issued from File No. IV/16/04/2008-STC(T)]

Encl: As above.

(P.K.JAIN)

COMMISSIONER

1. As per mailing list. (Both Trade and Department.)

2. Members of the R.A.C.

Copy to:

The Superintendent, Computer Section for uploading in the Departmental Website.

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)

Notification No. 45/2007 – Service Tax

New Delhi, the 28th December, 2007
7 Pausa, 1929 (Saka)

G.S.R. (E).- In exercise of the powers conferred by sub-sections (1) and (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Service Tax Rules, 1994, namely :-

1. (1) These rules may be called the Service Tax (Sixth Amendment) Rules, 2007.
(2) They shall come into force on date of their publication in the official gazette.

2. In the Service Tax Rules, 1994,-
(A) in rule 5,-
(a) for sub-rule (2), the following sub-rule shall be substituted, namely:-

“(2) Every assessee shall furnish to the Superintendent of Central Excise at the time of filing of return for the first time or the 31st day of January, 2008, whichever is later, a list in duplicate, of-
(i) all the records prepared or maintained by the assessee for accounting of transactions in regard to,-

(a) providing of any service, whether taxable or exempted;
(b) receipt or procurement of input services and payment for such input services;
(c) receipt, purchase, manufacture, storage, sale, or delivery, as the case may be, in regard of inputs and capital goods;
(d) other activities, such as manufacture and sale of goods, if any.

(ii) all other financial records maintained by him in the normal course of business.”;

(b) sub-rule (4) shall be omitted;

(B) after rule 5 of the said rules, following rule shall be inserted, namely:-

“Rule 5A. Access to a registered premises. (1) An officer authorised by the Commissioner in this behalf shall have access to any premises registered under these rules for the purpose of carrying out any scrutiny, verification and checks as may be necessary to safeguard the interest of revenue.

(2) Every assessee shall, on demand, make available to the officer authorised under sub-rule (1) or the audit party deputed by the Commissioner or the Comptroller and Auditor General of India, 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 sub-rule (2) of rule 5;
(ii) trial balance or its equivalent; 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, as the case may be.’’.

[F. No.137/26/2007-CX.4]
(Ashima Bansal)
Under Secretary to the Government of India

Note.- The principal rules were notified vide notification no. 2/94-Service Tax, dated the 28th June 1994 and published in the Gazette of India, Extraordinary vide number G.S.R.546 (E), dated the 28th June 1994 and were last amended vide notification No.39/2007-Service Tax, dated the 12th September, 2007 vide G.S.R. 586 (E), dated the 12th September, 2007.

F.No.137/26/2007-CX.4

Government of India

Ministry of Finance

Department of Revenue

(Central Board of Excise and Customs)

* * *

New Delhi, dated 1^st January,2008

To,

(1) The Director General (Audit)

(2) The Director General of Service Tax, Mumbai

(3) The Chief Commissioners of Central Excise & Service Tax (All)

(4) The Commissioner of Service Tax (All)

Madam/Sir,

Subject : Maintenance and furnishing of records in service tax – reg.

Rule 5 of the Service Tax Rules, 1994 prescribes, inter alia, that records (including computerized records) maintained by the taxpayer in accordance with various laws are acceptable. In this rule, a new sub-rule (2) has been incorporated vide Notification No.45/2007-ST dated 28.12.07 to prescribe that the assessee while filing first return or the 31^st day of January 2008, whichever is later, would furnish a list of following records maintained by him for accounting of transactions in regard to providing any service, whether taxable or exempted; receipt or procurement of input services and payment for such input services; receipt, purchase, manufacture, storage, sale, delivery or, as the case may be, in regard of inputs and capital goods; other activities, such as, manufacture and sale of goods, if any, all financial records and statements. A new rule 5A has also been incorporated in the said Rules to prescribe that an officer authorized by the Commissioner shall have access to any premises registered under the Service Tax Rules for the purpose of carrying out any scrutiny, verification and checks as may be necessary to safeguard the interest of revenue and that the assessee shall provided, on demand, the specified records including trial balance or the equivalent. It may be noted that this rule does not envisage issue of any notification by a Commissioner for such authorization of officers. The requirement of authorization could be fulfilled by issue of an office order.

2. In this regard, it is clarified that records/documents required to be maintained under various laws such as the Income ax Act, Companies Law, the CENVAT Credit Rules, 2004, VAT and other State legislation would be acceptable, and the amendment made in the rule does not cast any additional responsibility on taxpayers in terms of maintenance of records.

3. The list of records, as required to be provided under said sub-rule(2) should be submitted once only. Once filed, further intimation would be required to be given only in case there is any change in the list (i.e.addition, deletion, modification in the types of records maintained) that had been furnished by the assessee.

4. A copy of the list furnished by the assessee would be sent of the jurisdictional Superintendent to the audit section.

5. The audit team or any other officer authorized by the Commissioner to visit the registered premises of an assessee shall give prior intimation to the assessee along with the list of documents that he requires for the purpose of scrutiny, verification or audit.

6. The taxpayer shall provide the records as requested by the authorized officer within a period of fifteen days from the date of request. In case, the taxpayer is unable to produce any of the records called for within the stipulated time, he shall intimate the same along with reasons for non-production of records, and the officer may allow further time for production of such records keeping in view the overall facts into account.

7. These amendments have been made in the service tax rules to enable the duly authorized officer to carry out audit or scrutiny as may be necessary to safeguard the interest of revenue.

Yours faithfully,

Sd/-

(Gautam Bhattacharya)

Commissioner (Service Tax)