The revenue department is considering a proposal to extend the time period for payment of service tax. At present, assessees have to pay service tax by the fifth of next month.
One of the proposals under consideration is to extend the time period until the 10th or 15th of the next month for all non-corporate and small assee.
As per the amendment made in the Service Tax Rules 1994, an assessee is required to pay service tax by the 5th of the next month or the quarter. Earlier the last date of service tax payments was the 25th after the end of the month or the quarter. However, the payment date for the month or the quarter ending March is 31st of the same month.
The decision to review the period follows several representations made to the department from small service providers, including goods transport operators and industry associations like Assocham. Most of the representations have sought restoration of the earlier position when the payment could be made by the 25th of the next month.
"The issue that some of the smaller service providers with a turnover of around Rs 10-15 lakh (Rs 1-1.5 million) have raised is that they do not have independent accountants or computerised records and, therefore, find it difficult to collate and pay tax by the fifth of the month. Similarly, goods transport operators have raised the issue that since they have to collate data from more than one place they need more time," an official said.
Officials said a final view was yet to be taken since the payment date had been fowarded to the fifth from the 25th in order to bring it at par with the payment date of excise.
"Another reason why the date was fowarded was to be able to compile the indirect tax collection for the month or the quarter in time, since the Customs data is collated by the end of each month and excise is available by the first week of the following month," an official said.
Industry associations like Assocham have in their representation to the finance ministry pointed out that prior to October 16, 1998, the due date of payment of service tax was the 15th of the month.
"Under the law, the government has prescribed different time period for corporate and non-corporate assesses - monthly and quarterly, but due date of payment in all cases is 5th of the month after the end of month or quarter as the case may be," it said, adding that the payment period should be extended by two weeks from the end of the month or the quarter, as the case may be, in which payments of value of taxable service are received.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
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