Centralised registration – Procedure – Suggestion

[V.K. Verma, Advocate]

Provisions and procedure:

Rule 4(2) of the Service Tax Rules' 1994 stipulates:

Where an assessee is providing a taxable service from more than one premises or offices and has a centralized billing systems or centralized accounting systems in respect of such service, and such centralized billing systems or centralized accounting systems are located in one or more premises or offices he may, at his option, register such premises or office where such centralized billing systems or centralized accounting systems are located.

Rule 4(3) further stipulates:

The registration under sub-rule (2) shall be granted,-

a.  by the Commissioner of Central Excise or the Chief Commissioner of Central Excise, as the case may be, in whose jurisdiction all the premises or offices providing the taxable service and the premises or office where centralized billing systems or centralized accounting systems is done, are located; and

b.   in cases other than (a) above, by such authority, as may be specified by the Board.

Rule 4(5) further stipulates:

The Superintendent of Central Excise shall after due verification of the application form, grant a certificate of registration in Form ST-2 within seven days from the date of receipt of the application. If the registration certificate is not granted within the said period, the registration applied for shall be deemed to have been granted.

Further procedure for applying and granting centralized registration has been clarified vide trade notices and circulars issued from time to time in this regard.

Trade Notice no. 52/2005 - STU dt. 13.06.2005, Madurai - 2 Commissionerate explained the procedure from filing application till grant of centralized registration and prescribed a check list containing 22 points which were to be verified before forwarding the application to the DGST. The procedure was further simplified vide circular F.No. 354/106/2005 - TRU dt. 08.08.2005 particularly keeping in view the difficulties being faced by the service providers because of delay in granting registration and the resultant delay in deposit the tax. The number of points in check list was reduced to 11 and vide its para 3 it is emphasized that the process of verification and forwarding of applications should in all the cases be completed within seven days from the date of receipt of the application for registration.

The procedure has been prescribed however the execution part is lagging. We are not very sure if any centralized registration has been granted within seven days. The law is also not clear about the implication of deemed registration. Banks do not accept tax challans without the Service Tax code no. mentioned therein. Service tax return too can not be filed in the absence of service tax registration number. Further the deptt may always be looser if a person collects service tax by mentioning the status of registration no. as APPLIED FOR and also if a person claims benefit of cenvat credit in case the Invoice does not display the registration number of the service provider.

Possible reasons for delay:

1. Pre verification process.

2. Dak receipt and dispatch process.

3. Forwarding application to wrong Registering Authority.

We understand that the delay is caused due to time consumed in pre-verification process being adopted by the dept. The Range (Jurisdictional Central Excise/ Service Tax DC/AC) works like a front office whereas the other related wings work like back offices. The Range, on receipt of an application for centralized registration in QUARDUPLICATE (which is no where prescribed), scrutinize the information provided in the application and thereafter send the application to the jurisdictional Commissioner. The jurisdictional Commissioner further scrutinize the application and attachments and raises queries, if any, to the concerned Range which in turn communicates the same to the assessee. The assessee then submits the clarification to the concerned Range which, after appraisal, further sends it to the jurisdictional Commissioner.  The information/ documents have to travel through the dak receipt and dispatch procedure. At times it takes a whole month to forward the dak by Range to Commissioner. Even in the office of Commissioner, an inordinate time is consumed in the dak process. Being satisfied from all the angles, the application is forwarded to the concerned Registering Authority by the jurisdictional Commissioner. The process consumes a lot of time. The Registering Authority thereafter grants the registration under intimation to the assessee with a direction to the concerned range to issue registration certificate on ST-2 with the STC no. The Range further takes its own time to complete the formality. Some times the application is forwarded to the wrong Registering Authority and then it is to be recalled and forwarded again to the right authority.

Suggestions:

In this regard we suggest as under:

1. Vide publicity should be given regarding documents to be attached with application for centralized registration.

2. Separate application form may be prescribed for the assessees whose all the business premises from where the services are rendered including the centralized office where the centralized billing/accounting is maintained, fall within the jurisdiction of same Commissioner/ Chief Commissioner of central excise. It will help the Range to send the file to correct registering authority.

3.  A conditional registration number and STC no., subject to filing monthly service tax returns till the registration is confirmed by the appropriate Registering Authority, be allotted and communicated to the assessee within seven days of receipt of the application on ST-1, by the Range itself after verifying that all concerned documents are attached with the application as provided in the aforesaid trade notice. It will facilitate the collection and deposit of tax with immediate effect. It will further help in smooth flow of business.

4. Queries raised by any back office, should also be sent to the assessee directly with a direction to file the reply either with the concerned Range or the said back office within a specified time. Range should be instructed to send any communication received in this regard from the assessee on the very next working day. It will not only help in reducing the time gap but will also help in communicating the actual problem/query thereby further reducing time in clarifications.

5.  Necessary network may be developed for filing the application form and other requisite information on site of the deptt/via e-mails.

We hope you shall find the above information/document in order. You are welcome for any discussion in this matter.