13 Reasons Why Service Tax Returns Get Rejected After Filing

There are many reasons why service tax returns get rejected even after what seems to be accurate and timely filing. This could be due to incorrect registration numbers, incorrect selection of details, choosing incorrect categories, etc.

Note: Service Tax has been replaced by the Goods and Services Tax (GST) starting 1 July 2017.

There are times when Service Tax Returns get rejected due to various reasons after filing. Many of these reasons are due to errors or oversights on the part of the taxpayer or due to technical or system errors. It is essential to be diligent while filing Service Tax Returns in order to minimise any chance of rejection.

Usually, some Service Tax Returns get rejected after uploading of the XML file for the ST3 return due to technical errors validated by the system. This is caused mainly due to the following reasons:

  1. Incorrect Selection of Return Type
  2. This error usually takes place when the taxpayer selects the incorrect return type option ie: Original return or Revised return

  3. Difference in Time Period:
  4. Sometimes rejections take place when the taxpayer has entered a different Financial Year and a different Period of Return in the XML file and in the upload screen

  5. Incorrect Registration Number:
  6. One of the more common reasons for rejection is due to the wrong or incorrect registration number entered by the taxpayer

  7. Incorrect LTU Details:
  8. This error takes place when incorrect Large Taxpayer Units (LTU) details are entered in Sl. No. A6 of the ST3 return

  9. Incorrect Selection of Constitution:
  10. Service Tax Returns are also rejected when the wrong or incorrect Constitution in Sl. No. A8 of the ST3 return is selected

  11. Incorrect Category:
  12. Rejections also take place due to incorrect selection of the following, for which the return is filed:

    • Service Provider
    • Receiver
    • Input Service Distributor
  13. Incorrect Rates:
  14. Many times Service Tax Returns are also rejected due to incorrect rate selection of the following:

    • Tax
    • EDU Cess
    • SHE Cess
  15. Incorrect Challan Amount:
  16. Rejections sometimes take place due to a higher amount entered in the Challan Details Section as opposed to the actual deposit amount

  17. Technical Errors:
  18. Technical errors take place due to the use of special characters in the return or due to errors at the time of the generation of the XML file among other reasons

  19. Uploading Multiple XML Files:
  20. Service Tax Returns are also rejected due to the uploading of multiple XML files, This usually happens when the taxpayer uploads multiple XML files without first getting a confirmation about the XML files he or she previously uploaded for the same return period

  21. Filing of Return Before Issue of Registration:
  22. Rejections can takes place when the taxpayer files Service Tax Returns before the issuance of registration

  23. Filing of Return For the Future Period:
  24. This error takes place when the taxpayer goes about filing the returns for the future period

  25. Mismatch in Data:
  26. Many times Service Tax Returns get rejected due to a mismatch in the data between the upload screen and the XML file for the following fields:

    • Return Period (Financial Year and Half Year Return Period)
    • The RC Number
    • LTU Details
    • Category of Registrant
    • Constitution of Assessee

    By avoiding these errors and oversights, taxpayers can successfully file their service tax returns without any fear or being rejected.

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