Friday, January 23, 2009

Service Tax Registration


Section 68
According to section 68 every person liable to pay the service tax under this Chapter or the rules made thereunder shall, within such lime and in such manner and in such form, as maybe prescribed, make an application for registration to the superintendent of Central Excise

Form for Registration:

The assessee is required to apply for registration in a simple ST-I form.

In addition to ST-1 at certain places a declaration form is also demanded from the person seeking registration.

Documents required to be attached

(a) Proof of address
(b) Copy of PAN No.
(c) AOA & MOA in case of Companies or Partnership Deed in case of Partnership Firm.
(d) List of Directors (in case of Company) and List of Partners (In case of Partnership firms)

Additional Document: - though not required as per statutory provisions, the department is generally asking a declaration about certain particulars of the business and date of commencement of business. Some time department provides the format of declaration or otherwise the person seeking registration may submit his own declaration. The contents of the declaration would be as Name, Address, Nature of Business, PAN, Type of Services, Number of Services Provided, Date of commencement of business, Authorized Signatory etc.

(d) Declaration about date of commencement of business

Further as per Trade Notice No. 76/2003 dated 6/11/203 issued by Commissioner of customs and central excise Hyderabad IV prescribes the details of information required to be submitted alongwith the ST-1 application.

Whether declaration made in ST-1 be questioned

As per Circular No. 72/2/2004 ST dated 2/1/2004 department is not allowed to question the declaration made by the person in the ST-1 form.

Where to apply for Service Tax Registration

Registration application should be submitted to the Superintended of the Central Excise.

The Jurisdiction of Central Excise Department for the purpose of Service Tax Matters is same as under the Central Excise Act, 1944.

Besides, the Central Government has appointed separate Service Commissionerate (Service Tax Cell) at select cities for efficient and effective management of Service Tax Department.

Therefore, where separate Service tax cells has been appointed then instead of visited the Central Excise office the service provider or receiver is advised to visit the service tax cell for the purpose of Registration and other related matters.

Time Limit - Rule 4

Every person liable for paying the service tax shall make an application for registration within a period of thirty days from the date on which the service tax under section 66 is levied :

However, where a person commences the business of providing a taxable service after such service has been levied, he shall make an application for registration within a period of thirty days from the date of such commencement

Registration Requirement for Small service provider (availing exemption upto Rs. 4 lakhs) - Registration requirements

Notification no. 6/2005 ST dated 1-3-2005 has been issued to grant exemption to small service provider subject to certain conditions.

Small Service Provide (hereinafter called as SSP)

An SSP can avail the exemption upto Rs. 4 lakhs in the current financial year.

As per section 69(1), a person who is liable to pay service tax is required to pay service tax is liable to obtain registration certificate. However, 69(2) has been inserted with effect from 13-03-2005 to provide that. "The Central Government may, by notification in the Official Gazette, specify such other person or class of persons, who shall make an application for registration within such time and in such manner and in such form as may be prescribed."

In exercise to the power granted as above, CG has issued two notification as:

1 Prescribing Service Tax (Registration of special categories of persons) rules, 2005 - Notification No. 27/2005 ST dated 07-06-2005

2 Persons, other than the persons who are liable to pay serviced tax, to obtain registration number - Notification No. 26/2005 ST dated 07-06-2005

Therefore, a person who is eligible for availing exemption under notification no. 6/2005 is required to apply for service tax registration number within 30 days from the date when his turnover of services exceeds rupees 3 lakhs.

This is a mandatory requirement, even if his likely turnover does not exceed Rs. 4.00 lakhs in the relevant financial year, he has to apply for registration after crossing the limit of Rs. 3.00 lakhs.

Registration of More than one Service

Where an assessee is provided more than one taxable services, he seek a single registration for all such services provided by him. Rule 4(4)

For this purpose he can submit a single ST-1 application form. While submitting the application he should indicate all the taxable services provided by him. - Circular No. 72/2/2004 - ST dated 2/1/2004

Where services are provided from more than one premise

Rule 4(2) has been changed with effect from 01-04-2005, and consequently the new provisions are being discussed hereinafter:

Before amending the rule 4(2) there were separate procedure for obtaining registration on the basis of Centralized Billing system or Centralized Accounting System. But, from 1-4-2005 an assessee is providing services from more than one premises the following procedure is to be followed:

However the registration granted under the provisions of erstwhile rule 4 (as existing immediate before 01-04-2005) shall remain valid for all purposes.

1 Option First - Rule 4(1) - Separate Registration

Separate registration for each premises from where services are being provided than there is no need to follow special procedure and obtain service tax registration simply filing a ST-1 form alongwith relevant documents before the Superintended of Central Excise.

Note: - Where the assessee is having more than one office and does not have either central accounting system or central billing system, he is required to obtain separate registration for each premises.

However, the assessee can opt for single registration for all the premises if he is following either centralized accounting system or centralized billing system. In such a situation authority for granting registration is different which is discussed herein below.

2 Option Second - Rule 4(2) and Rule 4(3) - Single Registration

- Registration may be obtained at the premises from where Central Billing is made or Central Accounting is done.

Situation one - Where all the premises are falling under the jurisdiction of one commissionerate

- Registration shall be granted by the Commissioner or Chief Commissioner of Central Excise instead of Superintended of Central Excise - Rule 4(3)(a)

Situation two - Where all the premises are not falling under the jurisdiction of one commissionerate

- Registration shall be granted by the Director General of Service Tax - Rule 4(3)(b) read with circular / letter no. F. No. 340-20-2005 dated 12-05-2005

- Procedure and action to be taken by the person seeking centralized registration - Guidelines

In this case application shall be filed before the AC / DC of central excise under whose jurisdiction the office for which registration is sought is situated. AC / DC shall verify the application form and send to Commissioner for further action. The commissioner of central excise shall certify the application and send the same to the DGST under intimation to the Chief Commissioner. DGST after being satisfied, will grant the permission to the Commissioner to grant the registration. Commissioner in turn will grant the registration to the applicant.

3 Option third - TRU instructions F. No. B 1/6/2005 Dated 27-07-2005

Assessee has an option to get the registration at ZO (Zonal Leval) or RO (Regional Level). This is the hybrid system of service tax registration. TRU has understood the difficulties faced by the assesses and allowed multiple centralized registrations to a business entities. TRU has quoted an example of banks. However, the basic condition remains same that is, 'ZO level or RO level office must have either centralized accounting or centralized billing.'

Transferability of Registration Certificate - Rule 4(6)

For the all reasons concerned, registration certificate is not transferable.

In all the situations including the followings where business is transferred or ownership has been changed etc. a new certificate is must.

- Where Proprietorship concern is changed to Partnership concern or vice-versa
- Where Proprietorship concern is changed to company
- Where business is inherited
- Division of HUF
- Merger or Demerger
- Sale or lease of a business etc.

Surrender of Registration Certificate -Rule 4(7)

Where is a registered person ceases to provide taxable services for which he is registered, he should surrender the registration certificate. Rule 4(7)

There is no time limit for surrender of registration certificate. Ideally it should be surrendered when all the taxes have been paid, all the returns have been filed etc.

There is no prescribed format of application for surrender of registration certificate. A simple application is sufficient for surrender of RC.

Surrender of Certificate in case of a person availing value based exemption (SSP)

SSP denotes small service provider.

An SSP who is, already, holder of the registration certificate and intends to avail the exemption under notification no. 6/2005 upto the value of Rs. 4 Lakhs, may surrender the RC if his likely turnover in the current financial year would not exceed Rs. 3 lakhs.

There is no specific procedure addressing this situation, but after combined reading of Section 69, Rule 4 and Notification No. 26-2005, it may be concluded that SSP can surrender the RC within the exemption limit.

Input Service Distributor - Registration requirements

The concept of input service distributor came from the Cenvat Credit Rules, 2004.

Before 16-06-2005 there was no specific provision in respect of input service distributor to have service tax registration number.

However, w.e.f. 16-06-2005, two notification has been issued in this regard:

3 - Prescribing Service Tax (Registration of special categories of persons) rules, 2005 - Notification No. 27/2005 ST dated 07-06-2005

4 - Persons, other than the persons who are liable to pay serviced tax, to obtain registration number - Notification No. 26/2005 ST dated 07-06-2005

Time Limit

An input service distributor shall apply for registration within 30 days from:

- The date of commencement of business or
- 16-06-2005

Centralized Registration

Whether an input service distributor can apply for centralized registration?

In the opinion of author, the answer is negative. Centralized registration facility is available for a person who is providing taxable services and liable to pay service tax. If more than one office of a business entity wants to distribute the input services and cenvat credit thereon to the other location which is liable for payment of service tax, a separate registration will be required for each such office.

Consequence for delay or non registration under service tax

Before 10-09-2004 there was a mandatory penalty of Rs. 500/- for delay or non registration in seeking registration under section 75A. Salt to the injury was that the department was asking the same to deposit in advance before applying for registration.

From 10-09-2004 the section 75A has been omitted and consequently there is no mandatory penalty is there for failure to apply for registration.

But, even after deletion of section 75A there may be a maximum penalty of Rs. 1000/- for failure to pay registration under section 77.

However, penalty under section 77 is general penalty and not mandatory and before imposing this penalty the proper office has to issue a show cause notice and give an opportunity of being heared.