Registration - Service Tax Practice Manual / Ready Reckoner - Service Tax

Registration A. Registration - Basic Provisions B. Small Service Provider - Person availing exemption upto Rs. 10 lakhs C. Registration of More than one Service D. Centralized Registration E. Transferability of Registration Certificate F. Amendment in the Registration Certificate G. Surrender of Registration Certificate H. Input Service Distributor - Registration requirements I. Consequence for delay or non-registration under service tax ========== A. Registration - Basic Provisions Section 69 / Rule 4 According to section 69 (read with rule 4 ) every person liable to pay the service tax under this Chapter or the rules made there under 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. The registration granted shall be subject to such conditions, safeguards and procedure as may be specified by an order issued by the Board. Form for Registration The assessee is required to apply for registration in ST-I form . Application for registration is required to be submitted online through aces.gov.in website. Documents, time limits and procedures for filing of registration applications for single premises In order no.1 / 2015 dated 28-02-2015 , CBEC has prescribed certain documents, time limits and procedures with respect to filing of registration applications for single premises. Applicants seeking registration for a single premises shall file the application online. Once the completed application form is filed in ACES, registration would be granted online within 2 days. On grant of registration, the applicant would also be enabled to electronically pay service tax. The applicant is required to submit specified documents by registered post / Speed post to the concerned Division within 7 days of filing the Form ST-1 online for the purpose of verification. The registration certificate may be revoked by the Deputy/Assistant Commissioner in specific situations after providing opportunity of being heard to the party. Important: Order No. 1/15-ST, dated 28.2.2015 , effective from 1.3.2015 has been issued, prescribing documentation, time limits and procedure for registration. The details is given below: Questioning of declaration made in ST-1 As per Circular No. 72/2/2004 ST dated 2/1/2004 department is not allowed to question about correctness of the declaration made by the person in the ST-1 form . 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 No fees for registration Registration under Service Tax Law is granted free of cost. No fee is needed to be paid with application of registration. ========== B. Small Service Provider (SSP) - Person availing exemption upto Rs. 10 lakhs Notification no. 6/2005 ST dated 1-3-2005 has been issued to grant exemption to small service provider subject to certain conditions. An SSP can avail the exemption upto Rs. 10 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 As per section 69(2) to provide that. The Central Government (CG) 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 no. 27/2005 and 26/2005 both dated 7-6-2005 for: 1. Prescribing Service Tax (Registration of special categories of persons) rules, 2005 2. Registration procedure for above mentioned special categories of persons 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 9 lakhs. This is a mandatory requirement, even if his likely turnover does not exceed Rs. 10.00 lakhs in the relevant financial year; he has to apply for registration after crossing the limit of Rs. 9.00 lakhs. ========== C. Registration for More than one Service Where an assessee is providing more than one taxable services, he may seek a single registration for all such services provided by him. See Rule 4(4) For this purpose he is required to submit a single ST-1 application form. While submitting the application he should indicate all the taxable services provided by him. ========== D. Centralized Registration 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, with effect from 1-4-2005 an assessee is providing services from more than one premises the following procedure is to be followed:. 1) Option First - Rule 4(1) - Separate Registration Where assessee seeks separate registration for each premise from where services are being provided than he is not required to follow special procedure and obtain service tax registration. Simple filing ST-1 form along with relevant documents before the Superintended of Central Excise is sufficient. 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 premise. 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 (Centralized registration) Centralized registration procedure once again changed by way of amending rule 4(2) and 4(3) with effect from 2-11-2006. Accordingly the centralized registration is being granted by the Commissioner of Central Excise under whose jurisdiction the premises or offices, from where centralized billing or accounting is done, are located. Earlier the facility for Centralized registration was available only to the provider of output taxable services. But with effect from 2-11-2006 the facility of Centralized registration is available to the followings persons who:- (i) provides such service from more than one premises or offices; or (ii) receives such service in more than one premises or offices; or, (iii) is having more than one premises or offices, which are engaged in relation to such service in any other manner, making such person liable for paying service tax, The condition for opting centralized registration is that the person opting for centralized registration should either has centralised billing system or centralised accounting system in respect of such service, and such centralised billing or centralised accounting systems are located in one or more premises. He may at his option, register such premises or offices from where centralised billing or centralised accounting systems are located. ========== E. 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. Where a private limited company converts itself into a public limited company, there is no transfer of business. ========== F. Amendment in the Registration Certificate Earlier there was no specific provision in the Service Tax Rules, but Sub Rule 5A has been inserted with effect from 1-3-2006 vide notification no. 5/2006 ST dated 1-3-2006 to make it mandatory that all the changes in the ST-1 e.g. change in name or address of the applicant, premises from which service is provided or assessee starts providing new taxable services other than services for which he is already registered, must be informed within 30 days from the date of such change. Obtaining fresh registration certificate is not required. After 1-07-2012, all services were covered under All Taxable Services other than in the Negative List . Later in Nov.2012, the earlier service heads were restores through circular. In this case, assessee were required to add these new services in their registration by applying electronically, assessee will be able to file return only after amendment application is approved by the Range Superintendent. Further, such changes shall be intimated in writing to the jurisdictional Assistant Commissioner or Deputy Commissioner of Central Excise, as the case may be. . ========== G. Surrender of Registration Certificate (RC) - Rule 4(7) Where a registered person ceases to provide taxable services for which he is registered, he immediately should surrender the registration certificate. All the registration certification shall be surrendered before the Superintendent of Central Excise. With effect from 1-03-2006, Rule 4(8) further provides that on receipt of the certificate of registration, the Superintendent of Central Excise shall ensure that the assesse has paid all his money due to the Government under the provisions of the Act and then he will cancel the registration certificate. There is no prescribed format of application for surrender of registration certificate. A simple application is sufficient for surrender of RC. After introduction of online system, registration certificate is required to be surrendered online. Though there is no specific requirement in the rules, an intimation to be sent to the Superintendent in hard copy. Till the registration certificate is not cancelled, the concerned person may be required to file or submit all the information, documents etc. as the case may be, if required by the Superintendent of Central Excise. However, in ordinary course, unless contrary directed by the department, it is presumed that registered certificate has been cancelled by the department concerned on receipt of surrender application. Surrender of Registration Certificate Generally There is wide confusion and ambiguity about manner and procedure for surrender of service tax registration certificate obtained but not required now. Some situations are enumerated herein below in which the registrant would like to surrender the registration certificate: 1. Value of Taxable service is less than 9 Lakhs. 2. Closer of business Operation 3. Merger with another Unit/entity. 4. Any other reason (Like centralized registration or so) Now, commissioner of Service Tax, Chennai has issued a trade notice no. 9/2007 dated 7-3-2007 prescribing the format of application form for surrendering the certificate . In general, department insist for an affidavit for the person before accepted surrender application though not provided in the statute. ========== H. Input Service Distributor - Registration requirements w.e.f. 16-6-2005 The concept of input service distributor came from the Cenvat Credit Rules, 2004. Two notifications have been issued in this regard: 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 service 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, whichever is later. Centralized Registration in case of Input service distributor Whether an input service distributor can apply for centralized registration? The facility for centralized registration was not available for the purpose of input service distributor upto 1-11-2006. But with effect from 2-11-2006 the facility for centralized registration is also available and single centralized registration for providing output services and availing Cenvat credit in respect of each location is sufficient. In the opinion of author, the person who has taken centralized registration on or before 1-11-2006 for the purpose of providing output service shall now be eligible for availing Cenvat credit in respect of each location without any limitation of the provisions of law. ========== I. Consequence for delay or non-registration under service tax As per section 77 of the Finance Act, 1994 failure to apply for registration attracts penalty which may be extend to ten thousand rupees. ==========