The following instructions/clarifications are issued with regard to the visits by the Central Excise Officers to the premises of the Service Tax Asses

Indian Service Tax

Visits

[TN No. 103/99, dated 1/10/1999 of the Madurai Commissionerate)

Sub:- Service Tax - Visits by Central Excise Officers to the premises of Service Tax Assessees.

The following instructions/clarifications are issued with regard to the visits by the Central Excise Officers to the premises of the Service Tax Assessees.

The Service Tax being a comparatively new levy and public awareness and acceptance of the levy being very low, in order to increase compliance with the law, department has from the beginning stressed upon collection of tax on mutual faith. Accordingly, many irritants such as routine visits to the assessees' premises and calling for documents have not been encouraged. The Central Board of Excise and Customs had earlier desired that no visits should be made by the Central Excise Officers to the premises of the assessees for carrying out any routine check. The Board also desired that the visits for the purpose of rectification of mistake under Section 74 of Chapter V of the Finance Act, 1994 may be conducted only with the prior approval of the Commissioner of Central Excise. In spite of such clear instructions certain instances of visits by Central Excise Officers to the premises of the service tax asstssees for the routine purposes and without giving any prior notice have been brought to the notice of the Department by the Trade.

With a view to ensure that such complaints from Trade are not received, it is hereby advised that any visit to the premises Of the Service Tax assessee may be made only after giving the concerned assessee a notice in writing explaining therein the purpose of such visits. The officer should also clearly indicate the documents which may be required by them during their visits. No visits should be made without giving a clear notice of 15 days to the assessee and all such visits shall be only with the prior approval of the Commissioner.

The above guidelines would not apply in the case where the department has received any specific information/intelligence regarding evasion of Service Tax or contravention of law by any assessee. In such cases the due process of law may be followed and action may be taken depending upon the exigency of the situation.

[TN No. 42-CE/ST/TECH/BOL/97, dated 31/3/1997 of the Bolpur Commissionerate]

Sub:- Service Tax - Visits of Central Excise Officers (Service Tax Cell) to the premises of assessee for conducting Audit.

Attention is invited to this Committee Trade Notice No. 52/CE/TECH/ BOLIST/94, dated 21/7/1994 (Circular No. 1/1/94, dated 29/6/1994) under which it was decided that no visits should be made by the Central Excise Officers to the premises of the assessees of service tax for carrying out any routine checks. Feedbacks have since been received from field formations regarding visits by the Central Excise Officers to the premises of assessees of service tax for carrying out any routine checks and audit by the internal audit wing of Central Excise department to ascertain whether the assessee is functioning in conformity with the law.

The issue is being considered for some time past and it has been decided that

• Visit for purposes of verification of mistake under Sec. 74 of Finance Act, 1994 (32 of 1994) may be conducted by the Service Tax Cell with prior approval of the Commissioner (Central Excise) once, in every two years;

• Audit of accounts/records relating to Telephone, insurance and stock brokers shall be conducted once a year;

• For auditing accounts/records of stock brokers the following norms may be applied:

• Stock brokers who pay Service Tax not exceeding Rs. five lakh per annum - 10% of such registered stock brokers shall be selected and 10% selective check of their documents be conducted.

• Stock brokers who pay service tax exceeding Rs. five lakhs but not exceeding Rs. fifty lakhs per annum 20% of such stock brokers shall be selected and 10% selective check of their documents be conducted.

• Stock brokers who pay service tax exceeding Rs. fifty lakhs per annum - 50% of such brokers shall be selected and 20% selective check of their documents be conducted.

The trade notice No. 52/CE/TECH/BOL/ST/94, dated 21/7/1994 stands modified to the above extent.