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Contributed by Deepa Sethi

E-Filing of Service Tax Returns


In the wake of automation in excise and service tax administration and in synchronization with the era of internet and e-governance, CBEC has floated ACES project - Automation of Central Excise and Service Tax.

As per the current provisions, half yearly service tax returns are to be filed within 25 days of the end of half year, i.e. by 25th Oct and 25th March. Till 1st October 2011 e-filing of return is mandatory only for an assessee who has discharged service tax liability of more than ten lacs during the previous year or current year, either by way of cash or cenvat credit or both. However w.e.f. 1st Oct 2011 it is mandatory for all the assessee to file their service tax return electronically.


Benefits of E-filing to assessee

  1. Unlike manual return which is to be filed during departmental office hours, assessee can file return electronically any time and from anywhere.
  1. Filing the service tax return electronically is hassle free and at present it does not require any digital signature.
  1. By filing e-return one avoids commuting time to department and long queues for filing return, thereby saving unproductive time and energy.
  1. E-filing of return reflects commitment towards social responsibility by eliminating unnecessary paper work in preparing and filing manual returns and challans.
  1. Reduced mathematical errors in return while data entry due to internal checks and error alerts in online software and offline utility.
  1. Online filed returns can be accessed anytime anywhere by just simply logging in the website for retrieving and printing.
  1. Filing returns online reduces physical interaction with department of which people are generally apprehensive.


Benefits of e-filing to Revenue

  1. The department is absolved from physical handling of paper returns and filing of the same to respective assessee file which becomes more difficult due to bulk returns on last dates.
  1. Reduction of redundant interaction with the assessee leaves department officials with more time for efficient work.
  1. Web based software stores data at a centralized server thereby standardizing the data content required to be captured and stored throughout the country.
  1. Various reports from e-filed returns can be generated instantly as compared to compiling of physical returns which is not only time consuming but prone to data entry errors.
  1. Challan details furnished in e-return are verified with payment deposited in bank and shortfall /excess is computed automatically.


System requirement for e-filing

  • E-filing of service tax return can be practically done from any normal computer and there is no specific requirement except for:
  • Microsoft Excel 2003 and above which should be macro enabled before use.
  • Internet connection
  • Java enable Browser like Mozilla Firefox or Internet Explorer 5.0 and above.
  • Valid and live e-mail address


Registration requirement

  • In case an assessee is not holding 15 digit PAN based Service tax payer number (known as STP code), same is to be applied to jurisdictional service tax range.
  • User name and password is required to login to the website in order to apply for, amend registration and filing/ revising returns and application to the service tax range should be made.


E-filing Process

  1. Returns can be e-filed either online in the logged in status or by downloading the updated excel utility available on the website to upload return later.
  1. Whatever method is chosen, it should be ensured that the assessee details, return and challan data should be entered cautiously and doubly checked before uploading. A prompt message to that effect is also flashed on the website, as once the return is uploaded, no modifications can be made and it can only be revised later.
  1. Returns are sometimes rejected by server due to invalid/ incorrect data entry like wrong premises code etc. It should be filed again after rectification till the acknowledgement status reflects “FILED” which should then be saved and printed as a proof of filing return.
  1. It should be noted that if a return was filed on due date but was rejected later due to discrepancies, it will not be treated as return filed in time and late fee as applicable will be payable.
  1. Revised e-return can be filed within a period of 90 days of filing of original return as per provisions of Rule 7B of STR,1994. Further revised e-return can only be filed of an electronically filed return and not a manually filed return.



  • Fee for late filing of return: As per Sec 70 of the Act read with Rule 7C of STR, late fee payable is calculated as Rs. 500 for delay of first 15 days, Rs. 1000 for delay of another 15 days and for further delay, Rs. 1000+ Rs. 100 for each delay of default upto maximum of Rs. 20,000.
  • Failure to furnish return: No specified penalty is provided in the Act for non furnishing of electronic return. However u/s 77(2) of the Act, penalty may extend up to Rs. 10,000.



  • It should be ensured that system date is correct while preparing return or it will either generate incorrect .xml file or will not generate at all.
  • Also ensure that the data entered is correct and valid as per the data validation for the field(s) else the return may be rejected by server after filing.
  • It is advisable to download updated utility every time for preparing offline returns as same is regularly modified to correct errors and to be in line with statutory amendments.
  • It is further advised to file NIL return even if no services are provided or no amount is received during the half year period.
  • Further it should not be forgotten that as per rule 5(2) of STR, at the time of filing first return an assessee has to furnish list of accounts maintained in relation to service tax. Since the return is filed electronically, the letter to that extent should be filed manually else penalty up to Rs. 10,000 may be levied.



Not all service tax assessee are having proficiency in computers or have necessary infrastructure to file the return electronically. They will definitely face problems which will be further aggravated by low or no connectivity at remote places, and slow server response. In such a case it is advisable to file return either manually or through registered post mentioning reasons for manual filing to avoid any penalty later.

There are always teething troubles in implementation of any project and a constant “resistance to change”. However, change is inevitable and it has to start with change in mindset, either by choice or by mandate. In the end, use of information technology and e-governance in any area is bound to make people more accountable and responsible and this is valid for both, the stakeholders, assessee and revenue.