The objective behind Service Tax audit is to ensure that assessee under Service Tax law complies with the provisions of Finance Act, 1994 Chapter ‘V’ and the rules made there under.
Service Tax is an indirect tax administered by Central Excise Department. Accordingly, an auditor means, a Central Excise Officer entrusted with the duty of conducting audit.
Service Tax audit cell is functioning headed by the Joint/Addl. Commissioner under the overall supervision of the Commissioner. The audit of all units is being conducted by a team of officers comprising of Superintendents and Inspectors.
Budget 2011 - Small scale sector
Vide Budget 2011-12 Finance minister has announced in his budget speech that individual and sole proprietor assessees with a turnover upto Rs 60 lakhs shall not be subject to audit.
(D. O. Letter From JS (TRU) – Service Tax)
For the categories mentioned at Sr. No. 2, 3, 4 the selection of assessee would be based on ‘risk parameters’. These taxpayers should be selected on the basis of assessment of the risk potential to the revenue.
Risk Parameters : An illustrative list.
a) High tax payers
(b) Desk review is performed on the basis of relevant documents and information about the taxpayer
(c) Information about the taxpayer and the system followed by him is gathered
(d) Internal Controls are evaluated.
(e) Verification of records is done, if there are any objections then clarification is sought from the taxpayer.
Commercial Training and Coaching Service: Amendment had taken place only after the disputed period in the appeal. There is no provision for applying the said changes retrospectively. Further, a part of the demand relates to inclusion of Mess charges. By no stretch of imagination, the Mess charges collected can be considered as receipt for rendering the service of ‘Commercial Training and Coaching'.
Limitation: Extended Period: Further we find that the show cause notices was issued based on some Audit objection. There is no justification for invoking the longer period. Therefore, the demand is also hit by time bar. Appeal allowed.
Audit Enquiry: Limitation: Audit Enquiry and the Audit Note clearly disclose the fact of the appellants having disclosed all the facts. There is no finding pertaining to any suppression of facts leading to recovery for larger period. Stay application is allowed.