Rate of Service Tax on Banking & Other Financial Services during different periods :
Period |
Service Tax |
EC |
SHEC |
SBC |
KKC |
Total Rate |
16.07.2001 to 13.05.2003 |
5% |
– |
– |
– |
– |
5% |
14.05.2003 to 09.09.2004 |
8% |
– |
– |
-| |
– |
8% |
10-09-2004 to 17-04-2006 |
10% |
2% |
– |
– |
-C |
10.20% |
18-04-2006 to 10-05-2007 |
12% |
2% |
– |
– |
– |
12.24% |
11-05-2007 to 23-02-2009 |
12% |
2% |
1% |
– |
– |
12.36% |
24-02-2009 to 31-03-2012 |
10% |
2% |
1% |
– |
– |
10.30% |
01-04-2012 to 31-05-2015 |
12% |
2% |
1% |
– |
– |
12.36% |
01.06.2015 to 14-11-2015 |
14% |
– |
– |
– |
– |
14% |
15.11.2015 to 31.05.2016 |
14% |
– |
– |
0.5% |
– |
14.5% |
With effect from 01.06.2016 |
14% |
– |
– |
0.5% |
0.5% |
15% |
Many banks have gone for centralised registration under service tax, but few have taken registration at their zonal office/branch office level also. This will require the respective auditor’s to ensure compliance.
An Illustrative checklist for Central Statutory Auditors is given below:
In case of Branch-wise Registration
Whether the head office, regional offices, zonal offices have properly availed the CENVAT Credit of the tax/duty paid on the input services, input, capital goods as the case may be?
Whether the head office, regional offices, zonal offices have properly distributed the amount of service tax in the manner as specified in the CENVAT Credit Rules, 2004?
In Case of Single Registration of Head Office/Regional Office/Zonal Offices
Whether the permission of the Commissioner has been obtained for seeking single registration for the Head Office/Regional Office/Zonal Offices on the basis of Centralised Accounting? i.e. Centralised Registration
Whether the head office have filed the return of service tax on half yearly basis, i.e., for the half-year ending on 30th September and on 31st March within 25 days from the end of each half-year? (Form ST 3 is updated through notification no. 43/2016-ST, dated 28th September, 2016.
Whether the head office has made the payment of service tax so collected monthly, by 6th day of the following month. For the month of March, the payment should be made by 31st day of March. Online payment of Service Tax is mandatory since 1st October, 2014.
Whether bank has discharged the interest liability under section 75 of the Finance Act, 1994 on late payment of service tax made by bank?
Whether the appropriate amount of CENVAT Credit of the tax/duty paid on the eligible input services, inputs and the capital goods have been availed? Whether the head office has not availed depreciation u/s 32 of the Income Tax Act, 1961 on the amount of duty on the capital goods on which CENVAT Credit has been availed?
Whether the CENVAT Credit on input services have been taken on the basis of proper documents containing all particulars as prescribed by rule 4A of Service Tax Rules, 1994 read with Rule 9 of Cenvat Credit Rules, 2004, i.e., serially numbered invoice/bill, etc. containing the requisite information like, Name and address of the service provider, Service Tax Registration Number, Description of the services, Amount of the service tax, Name, address of the recipient bank, etc
Similarly, whether the bank has taken the CENVAT Credit in respect of input and capital goods on the basis of proper duty paying documents, containing all particulars as prescribed by Central Excise Rules, 2002 read with Rule 9 of Cenvat Credit Rules, 2004, i.e., serially numbered invoice / bill etc. containing the requisite information like, Name, address and registration no. of manufacturer, description of the goods, amount of the excise duty, name and address bank, etc.?
Whether the credit is taken in respect of input services at the time of receipt of invoice. Further, in case payment is not made within 3 months from the date of invoice, credit has to be reversed and bank will be eligible to re-avail credit after making payment to vendor.
Whether the credit taken in respect of services covered under full reverse charge mechanism is taken only after making payment of Service Tax. Further, credit in respect of services covered under partial reverse charge mechanism is taken after making payment of services and service tax.
Whether the bank have not availed the credit more than the payment made for service tax, which has been made available on the last day of the respective month?
Whether credit has been reversed for every month an amount equal to 50% of the CENVAT Credit availed on inputs and input services or w.e.f. 01.04.2016 credit has been reversed in respect of exempted services on actual basis (Rule 6(3B) of Cenvat Credit Rules, 2004)
Whether the Bank has made repayment of CENVAT Credit availed in respect of capital goods removed after being used? Bank is required to pay an amount equal to the CENVAT Credit taken on the said capital goods reduced by 2.5 per cent for each quarter (for computers 10%, 8%, 5% and 1% respectively for each quarter in the first year, second year, third year, fourth & fifth year) of a year or part thereof from the date of taking the CENVAT Credit. In case, duty calculated on transaction value is more than amount calculated by way of % specified supra, Bank has to pay amount equal to excise duty on transaction value.
In case, capital goods are cleared as waste and scrap, Bank has to pay an amount equal to duty leviable on transaction value.
In case, value of inputs or capital goods before being put to use is written off/provision to write off fully or partially has been made in books, bank has to reverse amount equivalent to CENVAT Credit taken.
In case of removal of goods as such, bank has to reverse 100% amount of CENVAT Credit availed.
Whether the Bank has submitted (in compliance of requirement of provision of rule 5(2) of Service Tax Rules, 1994) a list of records maintained by Bank to the concerned Superintendent, Service Tax. Whether bank maintains the records specified by it in terms of Notification no. 45/2007-ST dated 28.12.2007?