Service Tax Audit – Regaining Vigour?? {Chronological Analysis}

CA Ankit GulguliaBy Accommodation Times News Services

By CA.Ankit Gulgulia (Jain)

The Central Board of Excise & Customs have recently issued a Circular No. 181/7/2014-Service Tax following thenotification No. 23/2014-ST dated 5th December, 2014 in essence to neutralize the judgment of Delhi High Court in case of Travelite (India) Versus UOI And Others 2014 (35) S.T.R. 653 (Del.) which considered the service tax audit by departmental officers pursuant to Rule 5A as ultra vires the service tax statute. Below is Chronological Development of this controversy.

Brief Synopsis of Law on Service Tax Audit:-

a)      Section 94 of Finance Act, 1994 empowers central government to make rules for carrying out provisions of service tax.

b)      Rule 5A of Service Tax Rules, 1994 (prior to amendment vide Notification 23/2014) provided that department can (i) conduct verification (ii) Audit party authorized by commissioner or CAG can seek necessary audit documents.

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