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Service Tax Audit by Service Tax Department was initially started for selected few services i.e. Telephone, Insurance and Stock Brokers. Afterwards the Service Tax Department has increased the scope of Service Tax Audit. As per Service Tax Audit manual, the frequency of audit details are as under :- Service Tax Liability of Assessee

Annual Service Tax Liability (Cash + Cenvat) Frequency of Audit
1. Taxpayers more than Rs.3 Crores Every Year
2. Taxpayers between Rs.1 Crores & Rs.3 Crores Once in 2 Years
3. Taxpayers between Rs.25 Lakhs & Rs.1 Crores Once in 5 Years
4. Taxpayers below Rs.25 Lakhs 2 % of the total number every a assessee

During the Tax Audit, the Department requires full details of assessees profiles, copies of Service Tax Returns, details of CENVAT Credit Claim, Tax Payment Challans, Financial Statements, Annual Tax Returns of Income Tax, Sales Tax, Various Tax Audit Reports, Sundry Debtors, Bank Statements, Cross tallying of Sundry Debtors, Service Income Register, Realization, and Service Tax Liability etc. And in same way the CENVAT Credit claims are to be tallied. In short the assessee has to prove that the Service Tax Returns filed are true and correct with financial statements. Therefore specially the Large Tax Payers have to be very careful at the time of filing accurate Service Tax Returns. Our in-depth knowledge and long experience in Service Tax has made the complicated matter more simple for our clients from the initial stage. Our Preventive and corrective measures in the beginning period of proper tax computation and corrected Filing of Returns helps our clients to furnish the audit details without much effort.
Our latest knowledge of the Negative List of Services, Mega Notifications For Exemption Of Services, Declared Services, Partially / Fully Reverse Charge Mechanism, Place Of Provision Of Services amended CENVAT Credit, abatements etc. and the latest amendments upto the end of year 2016 and updates, will help our client for smooth completion of Department Audit. However, as per M/s Mega Cabs Pvt. Ltd. case in Delhi High Court in June,2016 it was held that Service Tax Audit by Service Tax Department is not having statutory backing and hence the Audit by Department Ultra Vires the Finance Act.


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Mobile. No. : +91-98 2026 1072 Ph. No. : +91-22-2513 3172 Fax : +91-22-2513 3172

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