Volume 3, Issue 5

29th March, 2010

Tax Alert
Changes in Indirect Taxes
Recently there have been two important changes on the indirect tax front, pertaining to Service Tax and Value Added Tax (VAT). This alert outlines these changes and their implications.

Compulsory Electronic mode of payment & filing of Service tax returns


In the era of e-governance, the Government of India had, some time back, introduced the facility of epayment of Service Tax and e-filing of Service Tax Return. The facility of efiling of returns is, till date, voluntary for assessees. However, e-payment was mandatory for the assessees whose "Service tax paid" amount exceeded Rs. 50 Lakhs during any current year or in the preceding year.

Mandatory e-filing vide latest Notification

However now, vide the Notification No. 01/2010 dated 19th Feb 2010, the service tax department desires to make both e-payment and e-filing mandatory for certain categories of assessees from 1st April, 2010. For this purpose, any person who has paid service tax including utilization of CENVAT Credit, of more than Rs. 10 Lakhs in the preceding year will be covered by this notification. Manual filing of service tax returns by such assessees would attract penalties for non filing of returns.

New procedure for e-filing

The procedure for e-filing includes following steps:

One time procedures:

  • File a User Id (TPIN) request with the Service Tax Department.
  • Get the unique User Id (TPIN) and Password

Regular Procedures:

  • Assessee has option to
    (a) File the return online direcly, or
    (b) Download the off-line return utilities which can be filled-in off-line, validated and later uploaded through the internet
  • The e-returns have to be uploaded on http:// www.aces.gov.in.

The detailed procedure for e-filing of returns is mentioned in Circular No. 919 / 09 / 2010 dated 23rd March 2010, a copy of which can be sent by SKP if you require it.

How SKP can help you

SKP can assist you in the registration process and in explaining to you the method of e-filing. It may be noted that the new procedure is effective 1st April, 2010 and would apply to all returns filed on or after this date. Thus, even the returns for the quarter ended 31st March, 2010 which would be due to be filed on or before 25th April 2010 will now be required to be electronically filed in case of assessees who are covered by the Notification. SKP can assist you in filing your e-Returns.

Value Added Tax (VAT) Rate in the State of Maharashtra set to rise from 4% to 5%

The Maharashtra Government has issued Notification No. VAT-1510/CR 47/Taxation-1 dated 10 March, 2010 enhancing the basic tax rate on goods covered under "Schedule C" of MVAT Act, 2002, to 5%. The enhanced tax rate is effective from 1 April, 2010 in respect of items falling under "Schedule C" that currently attract VAT @ 4%, other than the declared goods, as defined under the Central Sales Tax Act, 1956.