Those paying more than Rs 25 lakh in service tax will soon have to file their returns every month instead of once in six months.
Besides facilitating better audit, this move will give the government monthly data on service tax collections. This will also be a step towards harmonisation of service tax and central excise as the government looks at implementing the Goods and Services Tax (GST) after reaching a consensus with states.
The breather for service tax payers is that it will be a one-page form, a welcome relief from the 15-page format currently for both excise duty and service tax, being planned with an eye on a rollout of the proposed GST.
The Central Board of Excise & Customs (CBEC) is looking into the matter and the new form might be notified this month itself, said finance ministry officials.
The common return for central excise and service tax, EST-1, will be a significant reduction from 15 pages of two separate returns at present.
The logic behind changing the periodicity of filing service tax returns to monthly is to coincide the cycles for payment of the tax and filing of returns.
Assessees who paid tax of Rs 25 lakh or more in the previous year and new assessees other than individuals and firms will have to file the returns on a monthly basis, while the rest will do it on a quarterly basis.
Filing of excise duty returns depend on whether the unit concerned is located in export-oriented units
and also on various thresholds for the firms.