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PhD, NET(UGC), MBA (Finance), M.com (Finance), B.COM (professional), B.Ed (Commerce + English), DIM, PGDIM, PGDIFM, NIIT Accounting package...

Thursday, August 25, 2016

TOTAL QUALITY MANAGEMENT

TOTAL QUALITY MANAGEMENT
Total Quality Management (TQM)  is  an  enhancement  to  the  traditional  way  of  doing business.
Total  -  Made up of the whole
Quality  -  Degree of Excellence a Product or Service provides.
Management  -  Art of handling, controlling, directing etc.
TQM  is  the  application  of  quantitative  methods  and  human  resources  to  improve  all the
processes within an organization and exceed CUSTOMER NEEDS now and in the future.
 DEFINING QUALITY
 Quality can be quantified as follows
 Q=P/E
 Where
Q  =  Quality
 P  =  Performance
 E  =  Expectation
 DIMENSIONS OF QUALITY :
 Dimension  Meaning and Example
Performance                            Primary product characteristics, such as the brightness of the picture
 Features                                  Secondary  characteristics,  added  features,  such  as  remote
control
Conformance                          Meeting specifications or industry standards, workmanship
 Reliability                               Consistency of performance over time, average time of the
unit to fail
Durability                                Useful life, includes repair
 Service                                   Resolution of problems and complaints, ease of repair
 Response                                Human – to – human interface, such as the courtesy of the
dealer
Aesthetics                               Sensory characteristics, such as exterior finish
 Reputation                             Past  performance  and  other  intangibles,  such  as  being
ranked first
 QUALITY PLANNING
 The following are the important steps for quality planning.
 1.  Establishing quality goals.
 2.  Identifying customers.
 3.  Discovering customer needs.
 4.  Developing product features.
 5.  Developing process features.
 6.  Establishing process controls and transferring to operations.
 IMPORTANT POINTS TO BE NOTED WHILE QUALITY PLANNING:
 1.  Business, having larger market share and better quality, earn returns much higher than
their competitors.
 2.  Quality and Market share each has a strong separate relationship to profitably.
 3.  Planning  for  product  quality  must  be  based  on  meeting  customer  needs,  not  just
meeting product specifications.
 4.  For same products. We need to plan for perfection. For other products, we need to plan
for value.
QUALITY COSTS 
QUALITY COSTS:-
Quality  costs  are  defined  as  those  costs  associated  with  the  non-  achievement  of product/service quality as defined by the requirements established by the organization and its contracts with customers and society.
Quality cost is a cost for poor product of service.
ELEMENTS OF QUALITY COST:-
C o s t  of prevention
C o s t  of appraisal
C o s t  of internal failures
C o s t  of external failures.
1. PREVENTION COST
Marketing / Customer / User.
Product / Service / Design Development.
Purchasing
Operations (Manufacturing or Service)
Quality Administration.
2. APPRAISAL COST
Purchasing Appraisal Costs.
Operations Appraisal Costs
External Appraisal Costs
Review of Test and Inspection Data
Miscellaneous Quality Evaluations
3. INTERNAL FAILURE COST
Product or Service Design Failure Costs (Internal)
Purchasing Failure Costs
Operations (Product or Service) Failure Costs
4. EXTERNAL FAILURE COST
Complaint Investigations of Customer or User Service
Returned Goods
Retrofit and Recall Costs
Warranty Claims
Liability Costs
Penalties
Customer or User Goodwill
Lost Sales
ANALYSIS OF QUALITY COSTS:-
Index numbers
Trend  analysis
Pareto  analysis
The  purpose  of  quality  cost  analysis  is  to  determine  the  cost  of  maintaining  a certain level of quality. Such activity is necessary to provide feedback to management on the performance of quality assurance and to assist management in identifying opportunities.
INDEX NUMBERS:
Index  Numbers  are  often  used  in  a  variety  of  applications  to  measure  prices,  costs  (or) other  numerical  quantities  and  to  aid  managers  in  understanding  how  conditions  in one period compare with those in other periods.
TREND ANALYSIS:
Good visual aids are important communication tools.
Graphs are particularly useful in presenting comparative results to management.
Trend Analysis is one where Time-to-Time comparisons can be made which illustrates
PARETO ANALYSIS :
Joseph Juran observed that most of the quality problems are generally created by only a few causes. For  example,  80%  of  all  internal  failures  are  due  to  one  (or)  two  manufacturing problems. Identifying these “vital few” and ignoring the “trivial many” will make the corrective action give a high return for a low money input.
BASIC CONCEPTS OF TOTAL QUALITY MANAGEMENT:-
 Top  management committed to quality in all aspects
Customers  focus of the organization
Process  focus and improvement
Measurement of performance
Employee  involvement and empowerment
Continuous  improvement
Bench  marking
Teams  Supplier  teaming
Training  of employees
Inventory management
Communication 
Quality cost.
 PILLARS OF TQM:-
Problem solving discipline
Interpersonal  skills
Teamwork 
Quality improvement process.
SIX BASIC CONCEPTS OF TOTAL QUALITY MANAGEMENT
1.  Management Commitment
2.  Customer Focus
3.  Involvement and utilization of entire work force
4.  Continuous Improvement
5.  Treating Suppliers as Partners
6.  Establish Performance Measures for the processes
OBSTACLES IN IMPLEMENTING TQM :
Lack  of Management Commitment
Inability to change Organizational culture
Improper  planning
Lack  of continuous training and education
In compatible  organizational structure and isolated individuals and departments
In effective  measurement techniques and lack of access to data and results
paying  inadequate attention to internal and external customers
Inadequate  use of empowerment and teamwork
Failure  to continually improve
BENEFITS OF TQM :
Improved  quality
Employee  participation
Team work
Working relationships
Customer satisfaction
Employee satisfaction
Productivity
Communication
Profitability
Market share

Wednesday, August 10, 2016

Life Insurance Types

Life Insurance Types

list is not exhastive.
Whole life plan
  • You pay the premium till you retire or till the term of the policy.
  • Your family will get money ONLY after you die.
  • You MUST DIE to get back the money.
Endowment
  • Insurance company collect premium form the insured for the certain period of time like 15, 20, 25, 30 years.
  • If you die within that term, the company will pay huge money to your family.
  • If you don’t die within that term, company will return the premium you paid + some interest or bonus on it.
  • So, you DONOT NEED TO DIE to get back the money.
Term Plan
  • You keep paying premium for given period (5,10,20 etc. years)
  • If you die within that period, your family gets huge money.
  • But if you don’t die within that period, you will not get a single penny from the company.
  • So, you MUST DIE to get back the money.
  • Good part- Term Plans have cheaper premium than other plans.
ULIP(Unit Linked Insurance Policy)
  • You pay regular premium to the company.
  • Company invests it in Debt and Equity markets.
  • The profit generated by this investment, will be given to you no matter you die or not.
  • Thus you get the benefit of risk cover as well as the investment gains.
  • You DONOT NEED TO DIE to get back the money.
  • They pay higher return than Endowment.

keyman insurance policy

Definition: Life insurance on a key employee, partner or proprietor on whom the continued successful operation of a business depends. The business is the beneficiary under the policy. .
Key person insurance is simply life insurance on the key person in a business. In a small business, this is usually the owner, the founders or perhaps a key employee or two. These are the people who are crucial to a business--the ones whose absence would sink the company. You definitely need to consider key person insurance on those people.
Here's how key person insurance works: A company purchases a life insurance policy on its key employee(s), pays the premiums and is the beneficiary of the policy. If that person unexpectedly dies, the company receives the insurance payoff. The reason this coverage is important is because the death of a key person in a small company can cause the immediate death of that company. The purpose of key person insurance is to help the company survive the blow of losing the person who makes the business work.
The company can use the insurance proceeds for expenses until it can find a replacement person, or, if necessary, pay off debts, distribute money to investors, pay severance to employees and close the business down in an orderly manner. In a tragic situation, key person insurance gives the company some options other than immediate bankruptcy.
If the company is a sole proprietorship and employs just you and no other employees or has no other people who depend on it, then key person insurance isn't as necessary. You'll notice we didn't mention your family--don't confuse key person insurance with personal life insurance. If you have a spouse and/or children who depend on your income, then you should have personal life insurance for that purpose.
How do you determine who needs this insurance? Look at your business and think about who is irreplaceable in the short term. In many small businesses, it's the owner who holds the company together--he may keep the books, manage the employees, handle the key customers and so on. If that person is gone, the business pretty much stops.
How much key person insurance do you need? That depends on your business, but in general, you should get as much as you can afford. Shop around and get rates from several different agents; most life insurance agents will sell you a key person policy. Be sure to ask for term insurance--many agents will push whole or variable life, which have much higher premiums and commissions but are unnecessary for a key man policy. Ask for quotes on $100,000, $250,000, $500,000, $750,000 and $1 million, and compare the costs of each. Then think of how much money your business would need to survive until it could replace the key person, come up to speed and get the business back on its feet. Buy a policy that fits into your budget and will address your short-term cash needs in case of tragedy

Difference between Annuities and Life Insurance

The Difference between Annuities and Life Insurance

Both annuities and life insurance should be considered in your long-term financial plan. While both include death benefits, you buy life insurance in the event you die too soon and an annuity in case you live too long. In other words, life insurance provides economic protection to your loved ones if you die before your financial obligations to them are met, while annuities guard against outliving your assets.

Comparing deferred and immediate annuities


There are two main types of annuities-deferred and immediate-and two main types of life insurance-term and whole life.
  Life Insurance Annuities
  Term life Whole life Deferred annuities Immediate
annuities
Main reason for buying it Provide income for dependents Provide income for dependents or meet estate planning needs To accumulate money in a tax-deferred product To assure you don’t “outlive your income”
Pays out when You die You die, borrow the cash value or surrender the policy You make withdrawals One period after you buy the annuity, stops paying when you die*
Typical form of payment Single sum Single sum Single sum or income Lifetime income
Buyer’s age when it is typically bought 25-50 30-60 40-65 55-80
Accumulates money tax-deferred? No Yes Yes Yes, but only in the early payout years
Pays a death benefit? Yes Yes Yes *payments continue if the annuity has a guaranteed-period option that hasn’t expired at the annuitant’s death
Are benefits taxable income when received? No No, unless a cash value withdrawal exceeds the sum of premiums Yes, but only the part derived from investment income Yes, but only the part derived from investment income

types of assessment

Types of assessment
At present there are three types of assessment under service tax :-
  1. Self assessment
  2. Provisional assessment
  3. 3. Best Judgment assessment (Section 72)
Self assessment
The Finance act, 2001 has introduced self assessment for service tax returns; thereby sparing the assessees from the rigors of routine scrutiny and assessment. The facility of self –assessment was accorded to various assesses by amendment in Section 70 of the act. Prior to amendment by Finance Act, 2001 section 70 stood as under:-
“70. Every person liable to pay the service tax shall furnish or cause to be furnished to the Central Excise Officer, a return in such form and in such manner and at such frequency as may be prescribed.”
The amendment brought in by Finance act, 2001 is as under:-
“70. Every person liable to pay the service tax shall himself assess the tax due on the services provided by him and shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency as may be prescribed.”
In the system prior to 2004, the assessees use to file their returns under section 70 thereafter the Superintendent of Central Excise on the basis of information contained in the return filed under section 70 verify the correctness of the tax assessed on the services provided. If on verification the Superintendent was of the opinion that service tax on any service provided has escaped assessment or has been under assessed, the Superintendent refers the case to AC / DC, who pass the order of assessment as they thinks fit. The Finance Act, 2004 omitted section 71 w.e.f 10-09-2004 which provided a great relief to the assesses.
Therefore, after 2004 the return filed under section 70 is conclusive and it is not open for the department to call the documents or other information to verify the return, unless the department has some reasonable grounds to believe that assessee has not paid service tax properly.
Provisional Assessment
Where the assessee for any reason is not able to correctly estimate his service tax liability for any particular quarter or month, then he may request in writing to the AC / DC of Central Excise, as the case may be, giving reasons for payment of service tax on provisional basis and the AC / DC on receipt of such application may allow the assessee for payment of service tax on provisional basis on such value of taxable service as may be specified by him.
Procedure for provisional assessment
1. Informing the department: The assessee shall inform the department stating the reason why he wants to pay the service tax on provisional basis. There is no standard format or prescribed form for the application. It can be given on the letter head of the assessee. The AC / DC on receipt of such application may allow payment of service tax on provisional basis on such value of taxable service as may be specified by him.
2. Form ST 3A with the Service Tax return: Prior to 01-04-2010, the service tax return was filed manually, at that time there was a prescribed format for ST 3A which was required to be annexed with the half yearly return i.e. ST 3. In the present scenario the returns are filed online. There is no system of filing ST 3A separately. Infact in the ST 3 return itself there is column A13 in which the provisional order number as well as date is only required to be furnished. However, sub rule (5) of rule 6 is not yet updated as it still contains that – “he shall file a statement giving details of difference between the service tax deposited and the service tax liable to be paid for each month in a memorandum in Form ST 3A accompanying the quarterly or half-yearly return, as the case may be.”
3. Completion of ‘Provisional Assessment’: The AC / DC of Central Excise shall complete the assessment, whenever they deems it necessary, after calling such further documents or records as he may consider necessary and proper in the circumstances of the case.
4. Service Tax payable or refund due on final assessment: After the completion of final assessment, the assessee may be required to pay service tax on the additions made by AC / DC. Similarly, he may entitle to refund in case he paid excess service tax earlier.
· In case the assessee is required to pay differential tax after the final assessment, he shall be liable to pay interest on the amount so payable to the Central Government from the first day of the month succeeding the month for which such amount is determined, till the date of payment thereof. The rate of interest would be the rate specified by the Central Government by notification issued under section 11AA or section 11AB of the Central Excise Act.
· In case the assessee is entitled to refund then he shall be paid interest on such refund from the first day of the month succeeding the month for which such refund is determined, till the date of refund. The rate of interest would be the rate specified by the Central Government by notification issued under section 11BB of the act, ibid.
Best Judgment Assessment (Section 72)
Section 72 is reintroduced by the Finance Act, 2008 to authorize the Central Excise Officer to make assessment in the following case –
  1. Where the person liable to pay service tax fails to furnish the return under section 70;
  2. Where the person having made the return, fails to assess the tax in accordance with the provisions of this chapter or rules made thereunder.
the Central Excise Officer, may require the person to produce such accounts, documents or other evidence as he may deem necessary and after taking into account all the relevant material which is available or which he has gathered, shall by an order in writing, after giving the person an opportunity of being heard, make the assessment of the value of taxable service to the best of his judgment and determine the sum payable by the assessee or refundable to the assessee on the basis of such assessment.
- See more at: http://taxguru.in/service-tax/types-assessment-service-tax.html#sthash.Evn5C4Up.dpuf

Types of assessment
At present there are three types of assessment under service tax :-
  1. Self assessment
  2. Provisional assessment
3. Best Judgment assessment (Section 72)
TaxGuru_600x60_3b
Self assessment
The Finance act, 2001 has introduced self assessment for service tax returns; thereby sparing the assessees from the rigors of routine scrutiny and assessment. The facility of self –assessment was accorded to various assesses by amendment in Section 70 of the act. Prior to amendment by Finance Act, 2001 section 70 stood as under:-
“70. Every person liable to pay the service tax shall furnish or cause to be furnished to the Central Excise Officer, a return in such form and in such manner and at such frequency as may be prescribed.”
The amendment brought in by Finance act, 2001 is as under:-
“70. Every person liable to pay the service tax shall himself assess the tax due on the services provided by him and shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency as may be prescribed.”
In the system prior to 2004, the assessees use to file their returns under section 70 thereafter the Superintendent of Central Excise on the basis of information contained in the return filed under section 70 verify the correctness of the tax assessed on the services provided. If on verification the Superintendent was of the opinion that service tax on any service provided has escaped assessment or has been under assessed, the Superintendent refers the case to AC / DC, who pass the order of assessment as they thinks fit. The Finance Act, 2004 omitted section 71 w.e.f 10-09-2004 which provided a great relief to the assesses.
Therefore, after 2004 the return filed under section 70 is conclusive and it is not open for the department to call the documents or other information to verify the return, unless the department has some reasonable grounds to believe that assessee has not paid service tax properly.
Provisional Assessment
Where the assessee for any reason is not able to correctly estimate his service tax liability for any particular quarter or month, then he may request in writing to the AC / DC of Central Excise, as the case may be, giving reasons for payment of service tax on provisional basis and the AC / DC on receipt of such application may allow the assessee for payment of service tax on provisional basis on such value of taxable service as may be specified by him.
Procedure for provisional assessment
1. Informing the department: The assessee shall inform the department stating the reason why he wants to pay the service tax on provisional basis. There is no standard format or prescribed form for the application. It can be given on the letter head of the assessee. The AC / DC on receipt of such application may allow payment of service tax on provisional basis on such value of taxable service as may be specified by him.
2. Form ST 3A with the Service Tax return: Prior to 01-04-2010, the service tax return was filed manually, at that time there was a prescribed format for ST 3A which was required to be annexed with the half yearly return i.e. ST 3. In the present scenario the returns are filed online. There is no system of filing ST 3A separately. Infact in the ST 3 return itself there is column A13 in which the provisional order number as well as date is only required to be furnished. However, sub rule (5) of rule 6 is not yet updated as it still contains that – “he shall file a statement giving details of difference between the service tax deposited and the service tax liable to be paid for each month in a memorandum in Form ST 3A accompanying the quarterly or half-yearly return, as the case may be.”
3. Completion of ‘Provisional Assessment’: The AC / DC of Central Excise shall complete the assessment, whenever they deems it necessary, after calling such further documents or records as he may consider necessary and proper in the circumstances of the case.
4. Service Tax payable or refund due on final assessment: After the completion of final assessment, the assessee may be required to pay service tax on the additions made by AC / DC. Similarly, he may entitle to refund in case he paid excess service tax earlier.
 In case the assessee is required to pay differential tax after the final assessment, he shall be liable to pay interest on the amount so payable to the Central Government from the first day of the month succeeding the month for which such amount is determined, till the date of payment thereof. The rate of interest would be the rate specified by the Central Government by notification issued under section 11AA or section 11AB of the Central Excise Act.
 In case the assessee is entitled to refund then he shall be paid interest on such refund from the first day of the month succeeding the month for which such refund is determined, till the date of refund. The rate of interest would be the rate specified by the Central Government by notification issued under section 11BB of the act, ibid.
Best Judgment Assessment (Section 72)
Section 72 is reintroduced by the Finance Act, 2008 to authorize the Central Excise Officer to make assessment in the following case –
  1. Where the person liable to pay service tax fails to furnish the return under section 70;
  2. Where the person having made the return, fails to assess the tax in accordance with the provisions of this chapter or rules made thereunder.
the Central Excise Officer, may require the person to produce such accounts, documents or other evidence as he may deem necessary and after taking into account all the relevant material which is available or which he has gathered, shall by an order in writing, after giving the person an opportunity of being heard, make the assessment of the value of taxable service to the best of his judgment and determine the sum payable by the assessee or refundable to the assessee on the basis of such assessment.
- See more at: http://taxguru.in/service-tax/types-assessment-service-tax.html#sthash.Evn5C4Up.dpuf
Types of assessment
At present there are three types of assessment under service tax :-
  1. Self assessment
  2. Provisional assessment
3. Best Judgment assessment (Section 72)
TaxGuru_600x60_3b
Self assessment
The Finance act, 2001 has introduced self assessment for service tax returns; thereby sparing the assessees from the rigors of routine scrutiny and assessment. The facility of self –assessment was accorded to various assesses by amendment in Section 70 of the act. Prior to amendment by Finance Act, 2001 section 70 stood as under:-
“70. Every person liable to pay the service tax shall furnish or cause to be furnished to the Central Excise Officer, a return in such form and in such manner and at such frequency as may be prescribed.”
The amendment brought in by Finance act, 2001 is as under:-
“70. Every person liable to pay the service tax shall himself assess the tax due on the services provided by him and shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency as may be prescribed.”
In the system prior to 2004, the assessees use to file their returns under section 70 thereafter the Superintendent of Central Excise on the basis of information contained in the return filed under section 70 verify the correctness of the tax assessed on the services provided. If on verification the Superintendent was of the opinion that service tax on any service provided has escaped assessment or has been under assessed, the Superintendent refers the case to AC / DC, who pass the order of assessment as they thinks fit. The Finance Act, 2004 omitted section 71 w.e.f 10-09-2004 which provided a great relief to the assesses.
Therefore, after 2004 the return filed under section 70 is conclusive and it is not open for the department to call the documents or other information to verify the return, unless the department has some reasonable grounds to believe that assessee has not paid service tax properly.
Provisional Assessment
Where the assessee for any reason is not able to correctly estimate his service tax liability for any particular quarter or month, then he may request in writing to the AC / DC of Central Excise, as the case may be, giving reasons for payment of service tax on provisional basis and the AC / DC on receipt of such application may allow the assessee for payment of service tax on provisional basis on such value of taxable service as may be specified by him.
Procedure for provisional assessment
1. Informing the department: The assessee shall inform the department stating the reason why he wants to pay the service tax on provisional basis. There is no standard format or prescribed form for the application. It can be given on the letter head of the assessee. The AC / DC on receipt of such application may allow payment of service tax on provisional basis on such value of taxable service as may be specified by him.
2. Form ST 3A with the Service Tax return: Prior to 01-04-2010, the service tax return was filed manually, at that time there was a prescribed format for ST 3A which was required to be annexed with the half yearly return i.e. ST 3. In the present scenario the returns are filed online. There is no system of filing ST 3A separately. Infact in the ST 3 return itself there is column A13 in which the provisional order number as well as date is only required to be furnished. However, sub rule (5) of rule 6 is not yet updated as it still contains that – “he shall file a statement giving details of difference between the service tax deposited and the service tax liable to be paid for each month in a memorandum in Form ST 3A accompanying the quarterly or half-yearly return, as the case may be.”
3. Completion of ‘Provisional Assessment’: The AC / DC of Central Excise shall complete the assessment, whenever they deems it necessary, after calling such further documents or records as he may consider necessary and proper in the circumstances of the case.
4. Service Tax payable or refund due on final assessment: After the completion of final assessment, the assessee may be required to pay service tax on the additions made by AC / DC. Similarly, he may entitle to refund in case he paid excess service tax earlier.
 In case the assessee is required to pay differential tax after the final assessment, he shall be liable to pay interest on the amount so payable to the Central Government from the first day of the month succeeding the month for which such amount is determined, till the date of payment thereof. The rate of interest would be the rate specified by the Central Government by notification issued under section 11AA or section 11AB of the Central Excise Act.
 In case the assessee is entitled to refund then he shall be paid interest on such refund from the first day of the month succeeding the month for which such refund is determined, till the date of refund. The rate of interest would be the rate specified by the Central Government by notification issued under section 11BB of the act, ibid.
Best Judgment Assessment (Section 72)
Section 72 is reintroduced by the Finance Act, 2008 to authorize the Central Excise Officer to make assessment in the following case –
  1. Where the person liable to pay service tax fails to furnish the return under section 70;
  2. Where the person having made the return, fails to assess the tax in accordance with the provisions of this chapter or rules made thereunder.
the Central Excise Officer, may require the person to produce such accounts, documents or other evidence as he may deem necessary and after taking into account all the relevant material which is available or which he has gathered, shall by an order in writing, after giving the person an opportunity of being heard, make the assessment of the value of taxable service to the best of his judgment and determine the sum payable by the assessee or refundable to the assessee on the basis of such assessment.
- See more at: http://taxguru.in/service-tax/types-assessment-service-tax.html#sthash.Evn5C4Up.dpuf
Types of assessment
At present there are three types of assessment under service tax :-
  1. Self assessment
  2. Provisional assessment
3. Best Judgment assessment (Section 72)
TaxGuru_600x60_3b
Self assessment
The Finance act, 2001 has introduced self assessment for service tax returns; thereby sparing the assessees from the rigors of routine scrutiny and assessment. The facility of self –assessment was accorded to various assesses by amendment in Section 70 of the act. Prior to amendment by Finance Act, 2001 section 70 stood as under:-
“70. Every person liable to pay the service tax shall furnish or cause to be furnished to the Central Excise Officer, a return in such form and in such manner and at such frequency as may be prescribed.”
The amendment brought in by Finance act, 2001 is as under:-
“70. Every person liable to pay the service tax shall himself assess the tax due on the services provided by him and shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency as may be prescribed.”
In the system prior to 2004, the assessees use to file their returns under section 70 thereafter the Superintendent of Central Excise on the basis of information contained in the return filed under section 70 verify the correctness of the tax assessed on the services provided. If on verification the Superintendent was of the opinion that service tax on any service provided has escaped assessment or has been under assessed, the Superintendent refers the case to AC / DC, who pass the order of assessment as they thinks fit. The Finance Act, 2004 omitted section 71 w.e.f 10-09-2004 which provided a great relief to the assesses.
Therefore, after 2004 the return filed under section 70 is conclusive and it is not open for the department to call the documents or other information to verify the return, unless the department has some reasonable grounds to believe that assessee has not paid service tax properly.
Provisional Assessment
Where the assessee for any reason is not able to correctly estimate his service tax liability for any particular quarter or month, then he may request in writing to the AC / DC of Central Excise, as the case may be, giving reasons for payment of service tax on provisional basis and the AC / DC on receipt of such application may allow the assessee for payment of service tax on provisional basis on such value of taxable service as may be specified by him.
Procedure for provisional assessment
1. Informing the department: The assessee shall inform the department stating the reason why he wants to pay the service tax on provisional basis. There is no standard format or prescribed form for the application. It can be given on the letter head of the assessee. The AC / DC on receipt of such application may allow payment of service tax on provisional basis on such value of taxable service as may be specified by him.
2. Form ST 3A with the Service Tax return: Prior to 01-04-2010, the service tax return was filed manually, at that time there was a prescribed format for ST 3A which was required to be annexed with the half yearly return i.e. ST 3. In the present scenario the returns are filed online. There is no system of filing ST 3A separately. Infact in the ST 3 return itself there is column A13 in which the provisional order number as well as date is only required to be furnished. However, sub rule (5) of rule 6 is not yet updated as it still contains that – “he shall file a statement giving details of difference between the service tax deposited and the service tax liable to be paid for each month in a memorandum in Form ST 3A accompanying the quarterly or half-yearly return, as the case may be.”
3. Completion of ‘Provisional Assessment’: The AC / DC of Central Excise shall complete the assessment, whenever they deems it necessary, after calling such further documents or records as he may consider necessary and proper in the circumstances of the case.
4. Service Tax payable or refund due on final assessment: After the completion of final assessment, the assessee may be required to pay service tax on the additions made by AC / DC. Similarly, he may entitle to refund in case he paid excess service tax earlier.
 In case the assessee is required to pay differential tax after the final assessment, he shall be liable to pay interest on the amount so payable to the Central Government from the first day of the month succeeding the month for which such amount is determined, till the date of payment thereof. The rate of interest would be the rate specified by the Central Government by notification issued under section 11AA or section 11AB of the Central Excise Act.
 In case the assessee is entitled to refund then he shall be paid interest on such refund from the first day of the month succeeding the month for which such refund is determined, till the date of refund. The rate of interest would be the rate specified by the Central Government by notification issued under section 11BB of the act, ibid.
Best Judgment Assessment (Section 72)
Section 72 is reintroduced by the Finance Act, 2008 to authorize the Central Excise Officer to make assessment in the following case –
  1. Where the person liable to pay service tax fails to furnish the return under section 70;
  2. Where the person having made the return, fails to assess the tax in accordance with the provisions of this chapter or rules made thereunder.
the Central Excise Officer, may require the person to produce such accounts, documents or other evidence as he may deem necessary and after taking into account all the relevant material which is available or which he has gathered, shall by an order in writing, after giving the person an opportunity of being heard, make the assessment of the value of taxable service to the best of his judgment and determine the sum payable by the assessee or refundable to the assessee on the basis of such assessment.
- See more at: http://taxguru.in/service-tax/types-assessment-service-tax.html#sthash.Evn5C4Up.dpuf

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