10 Reasons Why Service Tax Returns Get Rejected

Service tax is a type of indirect tax charged by the government via service providers on the consumption of taxable services such as restaurants, cab services, cable connections, etc. Service tax returns are to be filed online by the taxpayers on a half-yearly basis. The returns should be filed on or before the 25thday of the month following the half-year period.

Sometimes, it happens that the service tax returns are rejected after filing. It may happen due to system error, technical error or any information overlooked by the taxpayer. You should be careful and alert to avoid chances of rejection. Some common reasons for such rejection may be as follows:

• Tax return period
• LTU details
• RC number
• Constitution of Assesses
• Registrant category

1. Incorrect selection of return type: This may happen if you choose the incorrect return type, i.e. original return in place of revised return or vice versa.
2. The difference in financial year and period of return: If you have selected a financial year and a different period of return, it can get your return rejected.
3. The registration number is incorrect: Incorrect registration number entered by the taxpayer is a common cause of return rejection.
4. Incorrect selection of a category: There are different categories for which you are filing the return, such as service provider, input service distributor, and receiver. Rejection may also happen when the category is chosen is incorrect or not applicable.
5. The rate selected is incorrect: Various rates are listed while filing the return and the appropriate rate has to be selected from Tax, EDU Cess and SHE Cess. Wrong selection of rates can get your return rejected.
6. Mismatch in challan amount: Incase a different or a higher amount has been mentioned in the challan section as compared to the actual challan deposited, your service tax return may be rejected.
7. The occurrence of technical errors: There may be different technical errors occurred while return filings such as usage of special characters or other errors during XML file submission.
8. Multiple XML files: Sometimes the taxpayers try to upload multiple XML files without checking the status of previously uploaded files for the same period. This may also lead to rejection of service tax returns.
9. Return filing for a future period: If the taxpayer has mistakenly filed the return for a future period, the tax return may get rejected.
10. Data mismatch: Any data mismatch between the upload screen data and XML file can get your returns rejected. Some of the fields that need special attention are:

Be cautious of entering the correct and appropriate details while filing the service tax returns. Double-check all the information before the submission and wait for confirmation before re-trying the upload of XML files. Being careful can save you from getting your return rejected.Ready to make the most of your money? Start your tax planning journey now!

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.