Page 100 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Unit 6: Service Tax

Notes
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Caution Service tax administration in India has before it, multi-dimensional challenges.
Few of them are related to the very nature and growth of service sector in the economy
and others relate to procedural aspects of the service tax collection.

6.6 Electronic Tax Administration

The Directorate has formulated a proposal for online web-based Electronic Tax Administration
system for service tax. This system envisages the facility for online registration, payment of tax,
filing of returns, assessment etc. for better tax administration and reducing the officer-assessee
interface. M/s. CMC Ltd conducted a system feasibility study for implementation of this proposal.
Their report indicates that such a system is not only feasible but could also be implemented at a
relatively low cost. A detailed proposal is under preparation. It is anticipated that with the
implementation of this system, service tax could be administered as the first e-tax in the country,
which could work as a model for other tax administrations.
As decided by the Board, the programme for computerization of Service Tax administration is
being worked out by the Directorate of Systems (South Zonal Branch) and Directorate of Service
Tax.

Directorate of Systems has worked out the framework for computerization of service tax
administration, with the help of NIC. They have introduced software programmes for Allotment
of Service Tax Payer Code Number (SAPS) and Service Tax Revenue Monitoring System (STREMS)
which are used for registration of assessees and filing of ST-3 returns.

Consequent to the above, the Central Board of Excise and Customs vide Circular No. ST 52/2003
dtd. 1.3.2003 (in F.No. 137/9/2003-CX4 has allowed E-filing of Service Tax Returns-ST-3 from the
month of April 2003. Initially, this facility has been extended to only select class or group of
service tax providers for services falling under following categories – viz.
1. Telegraph Services (TGH)

2. Telephone Services (TSU)
3. Life Insurance Services (LIS)

4. Insurance Auxiliary Services (IAX)
5. General Insurance Business (GIB)
6. Stock Brokers (STB)

7. Advertising Agencies (ADV)
8. Courier Services (COU)
9. Banking & Financial (BFN)

10. Custom House Agent (CHA)
The Central Board of Excise & Customs vide Circular No. 71/01/2004-Central Excise (ST), dated
20.01.2004, has extended this facility of E-filing to all the categories of services.

Task Describe the challenges before the service Tax Administration in India.

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