Registration under service tax
Why registration under service tax is necessary?
Registration is identification of an assessee. Identification is necessary to deposit service tax, file returns and undertake various processes ordained by law relating to service tax. Failure to obtain registration would attract penalty in terms of section 77 of the Finance Act, 1994, read with rule 4 of Service Tax Rules 1994.
Person liable for registration under service tax
- Every person who has provided a taxable service of value exceeding Rs. 9 lakh, in the preceding financial year, is required to register with the Central Excise or Service Tax office having jurisdiction over the premises or office of such service provider.
- In case a recipient is liable to pay service tax he also has to obtain registration.
- The ‘Input Service Distributors’ are also required to register them as per Notfn. No. 26/2005-ST dated 07.06.2005 as amended.
- Person providing taxable services but claiming benefit of notification no.33/2012 dated 20/06/2012
Meaning of an ‘assessee’ in relation to Service Tax?
As per the sub-section (7) of Section 65 of the Finance Act, 1994 (Chapter V), ‘assessee’ means a person liable to pay Service Tax and includes his agent.
When should a prospective assessee obtain registration?
- When a person commences business of providing a taxable service, he is required to register himself within 30 days of such commencement of business [sub-rule (1) of Rule 4 of Service Tax Rules, 1994].
- In case service tax is extended to a new service, an existing service provider must register himself, unless he is eligible for exemption under any notification, within a period of 30 days from the date of new levy [sub-rule 5A of Rule 4 of the Service Tax Rules, 1994].
Input service distributor
‘Input service distributor ‘means an office of manufacturer or producer of final products or provider of output service, which receives invoices issues under rule 4A of the service tax rules,1994 towards provision of input services and issue invoice, bill or, as the case may be Challan for the purpose of distributing the credit of service tax paid on the said services to such manufacturer or producer or provider, as the case ,may be.
Option to avail the facility of centralized registration:-
Service providers having centralized accounting or centralized billing system who are located in one or more premises, at their option, may register such premises or office from where centralized billing or centralized accounting systems are located and thus have centralized registration. Commissioner of Central Excise/Service Tax in whose jurisdiction centralized account or billing office of the assessee exists, is empowered to grant centralized registration in terms of Service Tax 4(2) and (3) of Service Tax Rules,1994.
As per sub-rule (4) of rule 4 of the Finance Act, 1994, only one Registration certificate is to be taken even if the person provides more than one service from the same premises for which registration is sought. However, while making application for registration all taxable services provided by the person should be mentioned.
If there is centralized registration, only one registration certificate is required for services provided from different premises, declared in the application for centralized registration.
When the existing assessee starts providing a taxable service not mentioned in the registration certificate He should intimate the jurisdictional Central Excise officer in writing, furnishing the name of taxable service he starts providing. No fresh documents are required for verification by the officer unless there is change in any other details given in the original or earlier application(s).
In case the changes relates to deletion of any premises or taxable service, the assessee may file intimation on plain paper along with the copy of the registration certificate.
For obtaining Service Tax Registration Having PAN is essential because the Service Tax Code/Registration number is generated based on the PAN issued by the Income Tax Department. The PAN based Service Tax Code/ Registration number is a must for payment of service tax using the G.A.R. 7 Form.
On cessation of business of providing taxable service The Service Tax Registration certificate (ST-2) should be surrendered to the concerned Central Excise / Service Tax authorities [Rule 4(7) of the STR, 1994].
Any change in premises/office, as provided in Form ST-1, should be intimated to jurisdictional Central Excise Officer.
In the event of transfer of the business, the transferee should obtain a fresh certificate of Service Tax registration based on his own PAN [Rule 4(6) of the STR, 1994]. The transferor should surrender his registration certificate.
A person liable to pay service tax must apply for registration before he starts paying service tax and filing of return, Service provider should apply well in advance to obtain registration, which is normally granted within 7 days of filing of application. If registration is not granted within seven days, it deems to have been granted.
Failure of registration may attract a penalty [Section 77(1)(a) of the Finance Act, 1994] upto Rs.5000/- or Rs. 200/- for every day during which such failure continues, whichever is higher. However, such penalty may be waived in case the assessee proves that there was reasonable cause for such failure [Section 80 of the Act].
If a registration certificate issued by the Department is lost, then The assessee is required to make written request for ‘duplicate’ registration certificate. The same will be issued by the Department after suitable entry in the registers/records of the Office.
Place of registration in case of Stock Broker/Courier Agent or Port Services
In the case of stockbrokers, they are liable for registration at a place where the stock exchange is situated. However, where trading is done online like in the case of NSE, OTCEI, stock broker is to be registered at a place where membership is granted and VSAT (very small aperture terminal) is installed. Courier agencies have been given an option to get themselves registered at regional level. This option has to be exercised in writing in respect of all regional offices. Similarly, in the case of stemmer agents, only such port offices are to be registered from where bills are raised to the shipping line.
Process of Registration Under Service Tax
Fill the Form ST-1 in duplicate. (Form ST-1 is available on the departmental website
List of Documents Required for Service Tax Registration:
- Photocopy of PAN card
- Proof of residence
- Constituent of the applicant
- Power of attorney in respect of authorized
- Copy of PAN card is necessary as a PAN based code (Service Tax Code) is allotted to every assessee.
These forms are required to be submitted to the jurisdictional Central Excise office (in case of six Service Tax Commissionrates, to the jurisdictional Division office. There are separate service tax commissionerates in Mumbai, Chennai, Delhi, Kolkata, Bangalore and Ahmadabad as mentioned in the previous chapter).
Categories of service recipients who are liable to seek registration
Normally, the ‘person’ who provides the taxable service on receipt of service charges is Responsible for paying the Service Tax to the Government (Sec.68 (1) of the Act). However, in
the following situations, the receiver of the Services is responsible for the registration.
- Where taxable services are provided by Foreign Service providers with no establishment in India, the recipient of such services in India is liable to register
- A company carrying on business of General Insurance and Life Insurance in respect of Insurance Auxiliary Services received by it from an insurance agent.
- For the taxable services provided by a Goods Transport Agency for transport of goods by road, the person who pays or is liable to pay freight is liable to pay Service Tax.
- The mutual fund or asset Management Company receiving Business Auxiliary services of distribution of mutual fund by a mutual fund distributor or an agent.
- Body corporate or firm located in India receiving sponsorship services.
by C.A. Deepika pamecha