General FAQ

Q1. What is the frequency of audit for service tax assesses ? Ans.1 The frequency of audit for other taxpayers would be as per following norms:i. Taxpayers with Service Tax payment above Rs.3 crores (Cash + CENVAT) (MANDATORY UNITS) to be audited every year. Taxpayers with Service Tax payment between Rs.1 crore and Rs.3 crores (Cash + CENVAT) to be audited once every two years. Taxpayers with Service Tax payment between Rs.25 lakhs and Rs.1 crore (Cash + CENVAT) to be audited once every five years. Taxpayers with Service Tax payment upto Rs.25 lakhs (Cash + CENVAT) 2% of taxpayers to be audited every year.

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Q2. What if any one fails to register ?

Ans. Failure of registration may attract a penalty upto Rs.10000/- or Rs. 200/-for every day during which such failure continues, whichever is higher
Payment of Service Tax. Q1. How to pay Service Tax?

Ans. Form G.A.R.7 (previously known as TR6 Challan) should be used to make service tax payments. Payment of service tax may be made at the specified branches of the designated banks. Service Tax can also be paid electronically, using e-payment facility Q3. What is GAR-7 challan? Where is it available? Ans GAR-7 challan is the document for payment of service tax. GAR-7 challan is available in any stationary shop selling Government forms. The format is also given on web-site www.cbec.gov.in

Q4. What is the interest rate applicable on delayed payment of Service Tax? Ans. Every person, liable to pay the service tax in accordance with the provisions of section 68 of the Act or rules made there under, who fails to credit the tax or any part thereof to the account of the Central Government within the period prescribed, shall pay simple interest @18% per annum. Interest is payable for the period from the first day after the due date till the date of payment of any defaulted service Tax amount.

Abatement

Q1. What is Abatement ? Ans, Abatement is the amount liable to be reduced from value of taxable service as per finance act and rules. In reference to service tax, abatement is a fixed %age of value of services that is allowed to be deducted from it for calculation of service tax. Suppose if you have abatement of 75% on transport of goods then we need to charge the 2.5% to our customer ( if service tax rate is 10%).