As an economy matures, contribution of the tertiary sector to the GDP increases. India has been witnessing this trend for quite some time now. Furthermore, leaner organizations relying upon forward and backward linkages with supply chain participants increase the role of service providers. Financial intermediaries, telecommunication and engineering service providers etc. also add to the volumes of services rendered in a growing economy.

The existence of a differentiating line between goods and services has always been the matter of spirited academic debate. Questions as to whether air conditioner manufacturers sell goods or cooling solutions have always surfaced among marketing men. Financial intermediaries call their services financial products. Therefore it is only apposite to bring more services into the tax net and align services and excise taxation regimes. This is being actively mulled upon in policy circles providing importance and flux to service tax.

The flux has resulted in sweeping changes in service tax legislation ever since it was first introduced in 1994. The issue of alignment adds its own facilitations and challenges (as seen in the unified CENVAT Credit Rules). Service tax is administered in most cases by excise jurisdictions and service tax assessees outnumber those of central excise. This leads to increased regulatory pressures and underscores the cause of voluntary compliance.

At BMR Managed Services (BMS), we maintain that service tax compliances commence with capturing tax positions and include maintenance of credit registers, handling reverse charges, rebate claims on export of services along with payment of tax and filing of returns.

Our services are woven around proprietary software and bring to clients the value proposition of applying their tax positions in every transaction.

Our compliance services include:

• Automated computation of service tax liability applying tax positions taken by clients in an IT enabled framework
• Automated generation of payment instruments (challans) and returns
• System driven maintenance of CENVAT credit registers factoring the complexities of:
  • Transfer of CENVAT credit etc.
  • Interplay on account of excise levies
• Handling specific processes pertaining to:
  • Input service distributors such as maintaining records of credit transferred across registered premises
  • Premises with centralized accounting / billing systems insofar as reporting needs of premises that come under the centrally registered premise
• Export of services and corresponding claims of rebate
• Handling reverse charges of service tax
• Tracking differential liability in cases of provisional assessments

Business rules of the IT enabled offering are derived from service tax notifications issued by the Central Board of Excise and Customs (CBEC), service categories listed under the Finance Act and the CENVAT Credit and Service Tax Rules serve as the foundation of our services and are synchronized with latest releases by CBEC.

We ensure a smooth transition from the client’s own environment to a managed services one. In doing so we perform a detailed transition exercise and train client personnel on the new IT enabled environment where they would be managers of the processes that they had been executing in their organizations.

We assign a team that is completely conversant with nuances of service tax and ensure that committed service levels are strictly adhered to.

We also undertake compliance review exercises where we review existing frameworks of clients and ascertain the level of compliances of their processes and IT systems.

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