Service Tax Registration : A Complete Guide

By | October 9, 2016

Contents

Service Tax Registration 

Who are the persons liable to pay service tax and take Service Tax Registration

Service Tax (Registration of Special Category of Persons) Rules, 2005 have been issued under these provisions. Following will require registration as per the Rules –

(a) Input Service Distributors

(b) Service provider who is exempt but whose aggregate value of taxable service exceeds Rs. nine lakhs (The limit was Rs. seven lakhs upto 31-3-2008).

Service provider whose value of services exceeds Rs. 9 lakhs requires registration, but still he can avail exemption if the value of service does not exceed Rs. ten lakhs per annum.

Central Government may specify other persons or class of persons (i.e. other than those who are liable to pay service tax) to make application for registration [section 69(2) inserted w.e.f. 13-5-2005].

They shall furnish return in prescribed form in prescribed manner at prescribed frequency to Superintendent of Central Excise [section 70(2) inserted w.e.f. 13-5-2005].

 

Form for applying for Service Tax Registration

Service Tax registration has to be applied  in form ST-1.

To whom to apply for Service Tax Registration 

A ‘person liable for paying service tax’ has to register with Superintendent of Central Excise under whose jurisdiction your premises fall.

As per section 69(1) of Finance Act, 1994, read with Service Tax Rule 4, every ‘person liable for paying service tax’ has to register with Superintendent of Central Excise.

When to apply for Service Tax Registration

A person should register within 30 days from date of commencement of the business of providing taxable service [Rule 4(1) of Service Tax Rules].

Actually , application is required to be filed when assessee’s turnover reaches one lakh below exemption limit (and not within 30 days), since when his service becomes newly taxable, he is entitled to exemption available to small service providers.

Registration certificate in ST-2 form is obtained after submitting necessary papers.

Procedure for Service Tax Registration

Procedure, conditions and safeguards for registration under service tax will be as prescribed by CBE&C by order – rule 4(9) of Service Tax Rules, inserted w.e.f. 1-3-2015.

The procedure in case of registration for a single premise, as prescribed in order No. 1/2015-ST dated 28-2-2015 issued by CBE&C, is as follows –

Online application for registration in form ST-1 is mandatory. Application should be through ACES (Automation of Central Excise and Service Tax)

Applicant must have Income Tax PAN. He must have mobile number and e-mail address. On application, applicant will be granted registration within two days. The number will be generated electronically. Online registration through website is adequate proof, even if not signed.

Registration should be granted in two days. Commissioner/Principal Commissioner should personally monitor implementation of new scheme – CBE&C Letter DOF No. 201/24/2003-CX.6 dated 3-3-2015 [317 ELT T17].

Assessee can start paying service tax after obtaining registration number electronically.

After application, documents prescribed in CBE&C order No. 1/2015-ST dated 28-2-2015 should be submitted with seven days. These documents are as follows – copy of PAN, photograph and proof of identity of person, proof of possession of premises, details of main bank account, memorandum and articles and Board resolution.

Business transaction number with other authorities like Customs Registration Number, IEC (Import Export Code), State Sales Tax Number, CST, Company Index Number etc. should be submitted.

Verification of premises can be done only with permission of Additional/Joint Commissioner. Thus, verification of premises is not mandatory [In case of registration under Central Excise, post facto verification of premises is mandatory].

If required clarifications are not provided by assessee, registration can be cancelled after granting personal hearing. If premises are non-existent, registration can be cancelled by Deputy/Assistant Commissioner

 

Even if registration number is obtained instantly on filing of application electronically, assessee has to still obtain registration certificate, though invoicing, payment of taxes and filing of returns can commence [unless registration number is blocked by department for some reason]

Copies may be self-certified by appellant – Para 2.6 of FAQ released by CBE&C in November 2007 [12 STT 1 (St)].

If application is signed by authorised person, power of attorney would be required. If registration is not granted within seven days (after submitting application with all particulars), it is deemed to have been granted – CBE&C circular No. 82/3/2005-ST dated 21-10-2005.

Name should be the name and style in which applicant is likely to carry on business. In case of partnership firm, name of all partners should be provided. In case of company, name of CEO, Chairman, MD and key directors should be provided. In case of society or any other business, name of key personnel engaged in management of business should be informed.

If applicant is HUF or proprietary firm, the name of proprietor/HUF should be mentioned in application form.

Latest Books on Service Tax


Service Tax Registration of aggregator

An ‘Aggregator’ is a person who arranges provision of service through a web based software application under his brand name.

The definition is as follows – Aggregator means a person, who owns or manages a web based software application, and by means of the application and a communication device, enables a potential customer to connect with persons providing service of a particular kind under the brand name or trade name of the aggregator – rule 2(1)(aa) of Service Tax Rules, as inserted w.e.f. 1-3-2015.

‘Brand name or trade name’ means, a brand name or a trade name, whether registered or not, that is to say, a name or mark, such as invented word or writing, or a symbol, monogram, logo, label, signature, which is used for the purpose of indicating, or so as to indicate a connection in the course of trade, between a service and some person using such name or mark, with or without any indication of the identity of that person – – rule 2(1)(bca) of Service Tax Rules, as inserted w.e.f. 1-3-2015.

The definition covers service providers like ‘Uber‘, who arrange taxi services through web booking.

It will not cover persons who arrange booking of cinema tickets, concert tickets, amusement park tickets, stock brokers etc. through web base portal, as they do not provide that service under their brand name. However, they will be liable for service charges recovered by them from customers and/or commission received by them from person selling the tickets/shares etc.

The ‘aggregator’ will be liable to pay service tax under reverse charge as per rule 2(1)(d)(AAA) of Service Tax Rules inserted w.e.f. 1-3-2015.

If the aggregator does not have physical presence in India, any person representing the aggregator for any purpose in India will be liable to pay service tax.

If such aggregator does not have physical presence or even representative in India, he will appoint a person to pay service tax in India.

The aggregator or his representative will require registration under service tax.

No Service tax registration required if no service tax payable as all services exported

Registration is required under section 69 of Finance Act, 1994 if a person is liable to pay service tax. Thus, if entire services were exported, service tax registration is not required – Textech International v.CST (2011) 33 STT 233 (However, if assessee intends to claim refund of input services under rule 5 of Cenvat Credit Rules or any other provision, it would be highly advisable to register under service tax provisions).

Single Service tax registration even if more than one services are rendered

If a person is providing more than one taxable service, he may make a single application. He should mention in the application all the taxable services provided by him. [rule 4(4)]. A person providing more than one taxable service is required to take only one single registration. He should indicate all taxable services provided by him in Form ST-1 – para 2.4 of CBE&C Circular No. 97/8/2007-ST dated 23-8-2007.

Application for Service Tax Registration to indicate description of services provided

Application for registration should indicate description of services as indicated in Annexure to ST-1, which was inserted w.e.f. 30-11-2012. The services on which service tax is payable under reverse charge mechanism shall also be included in application for registration. There are 119 descriptions which were defined in Finance Act, 1994. If the service provided does not fall in any of the categories, the category will be ‘Other Taxable Services’ [Sr. No. 120 of the list].

If any service is added later, application can be made electronically to get the service added in existing registration certificate.

Though the assessee is required to register under different heads and pay service tax under different heads, this is only for statistical purposes. For legal purposes, the definitions as existing upto 1-7-2012 are not valid after 1-7-2012.

Cenvat credit available even if not registered under Service Tax

Assessee can avail Cenvat Credit (if otherwise eligible) even if registration was not obtained. Cenvat Credit and eligibility of Cenvat Credit are independent issues.

Service Tax Registration does not mean service tax must be paid

Registration under service tax does not mean tax must be paid. If the taxable turnover is below specified limits, exemption can be availed. However, filing ‘Nil’ return (indicating value of service provided) is essential, to avoid late fees and penalties.

Registration determines location of service provider and receiver

As per Place of Provision of Service Rules, the place where assessee is registered under service tax is the first criteria in determining ‘location of service provider’ or ‘location of service receiver’. Hence, in some cases where refunds or exemptions are required to be claimed (like SEZ or EOU), it may be advisable to seek registration even if service tax is not payable. Of course, once Service Tax Registration is required, filing Nil return in time is mandatory to avoid late fee and penalty.

 

 

Service Tax Registration Certificate by excise officer

Declaration given by assessee in his application form ST-1 will be accepted by Superintendent of Central Excise. While granting registration, the rules do not permit the jurisdictional officer to question about the correctness of the declaration made by the service provider. Jurisdictional Superintendent of CE will grant registration immediately and in any case within seven days.

Service Tax Registration deemed to have been granted if not issued within seven days

If registration is not granted within seven days, it is deemed to have been granted – Circular No. 72/2/2004-ST dated 2-1-2004 – reiterated in para 2.6 of CBE&C Circular No. 97/8/2007-ST dated 23-8-2007 [Rule 4(5)].

Issue of Service Tax Registration certificate

The registration certificate will be granted by Superintendent of Central Excise in seven days in form ST-2. If the registration certificate is not granted within seven days, the registration shall be deemed to have been granted. If there is any change in name or place of the applicant, the registration certificate can be amended. If the business is transferred, fresh certificate of registration is necessary. If the assessee ceases to carry on the activity for which he is registered, he should surrender the registration certificate [Rule 4(7)].

Assessee can start issuing invoice, pay taxes, etc. even if ST-2 not issued

Assessee can file ST-1 application electronically, get registration number electronically and the submit required papers.

The assessee can start issuing invoices, paying service tax electronically and file returns electronically, even if ST-2 is not issued by the Superintendent (as registration is deemed to have been granted).

However, the provision of automatic registration does not apply to Centralised Registration.

Fees for registration of Service Tax

No official fees are payable

Is filing of returns for period prior to Service Tax Registration required?

Some times, assessee applies very late for registration, though he is liable to pay service tax even for period much earlier to date of registration. In such case, obviously, he has to pay service tax with interest even for period prior to registration. In such cases, in some cases, department asks assessee to file returns for earlier period also.

As per author view ,filing of returns for period prior to registration is not required. This is because as per section 73(3) of Finance Act, 1994, if assessee pays service tax with interest before receipt of show cause notice, the officer cannot issue any notice at all and the matter is closed .

Of course, if he does file returns (electronically) for period prior to registration, late fee upto Rs. 20,000 per return will become payable.

Issue of Service Tax Registration Certificate

The registration certificate will be granted by Superintendent of Central Excise in seven days in form ST-2. If the registration certificate is not granted within seven days, the registration shall be deemed to have been granted. If there is any change in name or place of the applicant, the registration certificate can be amended. If the business is transferred, fresh certificate of registration is necessary. If the assessee ceases to carry on the activity for which he is registered, he should surrender the registration certificate [Rule 4(7)].

STC code i.e. Service Tax registration number

Registration No., also known as ‘Service Tax Code (STC)’ is a fifteen digit PAN based number. First 10 digits of this number are the same as the PAN of such person. Next two digits are ‘ST’. Next three digits are serial numbers indicating the number of registrations taken by the service taxpayer against a common PAN – para 2.6 of CBE&C Circular No. 97/8/2007-ST dated 23-8-2007.

Premises code under Service Tax Registration Certificate

The registration certificate gives details of ‘premises code’ which is given on the basis of Commissionerate + Division + Range + Serial No. The number is given in the registration certificate ST-2 at Sl No. 5. This number is used for easy identification of location of registration of taxpayer – para 2.6 of CBE&C Circular No. 97/8/2007-ST dated 23-8-2007.

Payment of penalty cannot be insisted upon

Department cannot insist on payment of penalty before granting registration. Jurisdictional Officer shall accept the declaration given as per rule 4(5) and grant registration within seven days – CBE&C circular No. 76/6/2004-ST dated 3-3-2004 (Now application for registration is required to be filed electronically).

Penalty for late registration under Service Tax

If there is delay, interest for delayed payment will have to be paid, which cannot be waived. Though there is no mandatory penalty for delay in registration, penalty upto Rs. 10,000 can be imposed under section 77(1) of Finance Act, 1994 as amended w.e.f. 10th May, 2013 [Till 8-4-2011, the penalty was Rs. 5,000. During 8-4-2011 to 10th May, 2013, penalty upto Rs. 200 per day of delay could be imposed even if the total penalty exceeds Rs. 10,000. Now, maximum penalty that can be imposed is Rs. 10,000].

In addition, penalty can be imposed for late payment of tax, under section 76. In case of suppression of facts, wilful mis-statement, fraud and collusion, higher penalty is payable under section 78.

The penalty under section 76 or 77 is not automatic. If an assessee proves that there was reasonable cause for delay in registration or payment of service tax, the penalty can be waived or reduced.

However, interest under section 75 for late payment of service tax  is automatic and it cannot be waived.

Service Tax Registration when person is providing services which fall under more than one categories

If a person is providing more than one taxable service, he may make a single application. He should mention in the application all the taxable services provided by him. [rule 4(4)]. He has to file a single return.

If one service provider is providing more than one taxable service, he need to take only one registration. However, the certificate shall be endorsed for all taxable services and tax liabi-lity will have to be discharged separately for each of the taxable services separately. – CBE&C circular No. 51/13/2002-ST dated 7-1-2003.

If assessee is providing more than one taxable service, he should obtain single registration. While making application for registration, all taxable services provided should be indicated. Registration certificate ST-2 will indicate details of all taxable services provided by service provider. Single return giving details separately for each taxable service shall be given – CBE&C circular No. 72/2/2004-ST dated 2-1-2004.

Note that though the earlier definitions of 117 taxable services are not relevant for purpose of levy of service tax, registration is still required to be obtained on basis of earlier service heads as existing upto 30-6-2012.

Amendment to Service Tax Registration certificate

Amendment to registration certificate is required in following cases –

(a) Change in the information supplied in form ST-1 e.g. change in name or address of the applicant, various premises from which service is provided etc.
(b) Assessee starts providing new taxable service other than services for which he is already registered.

In such cases, amendment to registration is required. Obtaining fresh registration certificate is not required.

Amendment if new service is added after 1-7-2012

After 1-7-2012, all services were covered under ‘All Taxable Services other than in the Negative List’. Later in November, 2012, the earlier service heads were restores through circular (and not by amending law). Assessees were required to add these new services in their registration by applying electronically.

As per letter No IV(24)/20/2012-Systems dated 20-3-2013 [39 STT 10(St)] issued by Director-General, Systems, assessee should add these descriptions by applying online and get it approved from Range Superintendent. Assessee will be able to file return only after amendment application is approved by Range Superintendent.

Changes to be informed in form ST-1 within 30 days

Rule 4(5A) provides that if there is any change in information and details submitted in form ST-1 at the time of registration, the same should be informed to jurisdictional AC/DC within thirty days of such changes. The form ST-1 is both for new registration as well as amendment to existing registration certificate.

Submission of earlier Service Tax Registration certificate not required

While intimating any change in information furnished at the time of obtaining registration certificate, the assessee is required to submit self-certified copy of the registration certificate. Submission of original registration certificate to the department at the time of intimation of any changes is not required. Department will issue the amended registration certificate after cancelling the original registration certificate issued earlier – para 10.1 of D.O. F. No. 334/1/2007-TRU dated 28-2-2007 issued by Shri R Sekar, Joint Secretary (TRU). (All circulars issued by CBE&C, except letters of TRU have been withdrawn vide CBE&C Circular No. 96/7/2007-ST dated 23-8-2007. Thus, TRU letters are still valid).

Para 6 has been added in ST-2 form for this purpose w.e.f. 1-3-2007.

Para 2.7 of CBE&C Circular No. 97/8/2007-ST dated 23-8-2007 also states that if new premises are to be added to centralized registration or new taxable services are to be added, form ST-1 only indicating amendment/rectification required to be made in certificate should be submitted along with copy of original registration certificate. If deletion of any premises are required, an intimation on plain paper with copy of registration certificate should be submitted.

Loss of registration certificate of Service Tax

There is no specific procedure to obtain duplicate registration certificate. Normally, it may be given unless the officer is nasty.

Service Tax Registration cannot be refused and registration cannot be granted in category not applied for

In Karamchand Thapar & Bros. (Coal Sales) Ltd. v. UOI (2011)  35 VST 302 (Cal), it has been held that there is no provision either in the Finance Act, 1994 or in the Service Tax Rules, 1994, whereunder an application for registration can be refused. It has also been held that Commissioner of Central Excise and Superintendent of Central Excise have no power to grant registration on their own, even though no application for registration has been made. On a parity of reasoning, the Superintendent of Central Excise and the Commissioner have no power to grant registration in a category other than the category in which registration has been sought.

 Cancellation/surrender of Service Tax registration

If the assessee ceases to carry on the activity for which he is registered, he should surrender the Service Tax Registration certificate to the Superintendent of Central Excise [Rule 4(7)].

Assessee should file up-to-date returns and apply for cancellation. Service Tax Registration may not be cancelled if any demands are pending.

He should submit application for cancellation electronically.

If original registration certificate is not traceable, Xerox (if available) may be submitted. Now  it has been clarified that submission of original registration certificate is not required for any amendment.

Procedure for cancellation of  Service Tax Registration

On receipt of application with certificate under rule 4(7), the Superintendent of Central Excise shall ensure that assessee has paid all dues to Central Government under provisions of the Act and then he will cancel the registration [Rule 4(8)].

Department cannot suo motu cancel Service Tax Registration

It may be noted that the cancellation of registration may be done when the assessee applies for cancellation on his own or surrenders his certificate under Rule 4(7) and not in other cases.

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