Rule 4 of Service Tax Rules, 1994 deals with the procedure for registration for service tax. Rule 4(7) provides that every registered assessee, who ceases to provide the taxable service for which he is registered, shall surrender his registration certificate immediately to the Superintendent of Central Excise. Rule 4(8) provides that on receipt of the certificate for surrender, the Superintendent of Central Excise shall ensure that the assessee has paid all monies due to the Central Government under the provisions of the Act, and the rules and the notifications issued there under, and thereupon cancel the registration certificate.
The service tax registration may be surrendered for any of the following grounds-
- The turnover is below the threshold limit;
- The change in the constitution of the business;
- Death of proprietor;
- Closing the taxable service business;
- Taking centralized registration by surrendering the other multiple registrations pertaining to the branches;
- Shifting the business premises from one jurisdiction to another jurisdiction which requires surrendering of certificate in the old place and to get registration in the new place;
The Commissioner of Service Tax, Mumbai – I, vide Trade Notice No. 18/2013-ST, dated 19.12.2013 explained the formalities for surrender of the registration certificate. The surrender of registration is of two types – one is assessee who has obtained registration prior to 01.04.2010 and not migrated to ACES and the other is who got registration and migrated to ACES.
The procedure to be followed in case of online surrender is as detailed below:
- The application for surrender of registration certificate shall be filed online using the ACES module on www.aces.gov.in;
- The assessee who have misplaced the User-id and password for transacting in ACES may approach the ‘Help Desk’ of the respective Division along with filled in application for generating T-Pin;
- On successful filing of the application the assessee is to take print out of the application generated by ACES;
- The said printed application is to be signed by the assessee and to submit the jurisdictional Superintendent or Superintendent(s) of ‘Centralized Surrendered Cell’ in the concerned Division either in person or by post along with following documents-
- Application form and undertaking for surrender of service tax registration;
- Copies of ST-3 returns filed with the department from the date of taking registration till the date of surrender but up to a maximum of last six returns only;
- Copies of P& L Account and Balance Sheet from the date of taking registration to the date of surrender but for a maximum of last 3 financial years only;
- Details of show cause notice pending adjudication;
- Details of confirmed demands;
- Details of court cases;
- Details of audit conducted;
- In case of death of proprietor the death certificate of the proprietor;
- In case of change in constitution, necessary documents showing the change of constitution;
- In case of merger or acquisition, necessary documents such as order passed by the High Court or Article of Association to that effect;
- In case of centralized registration, copy of centralized registration showing the premises for which surrender application is being submitted;
- In case of multiple registration copy of registration certificate for which the applicant wants to continue the registration.
In case the assessee has not filed ST-3 returns it is not required to file fresh return for surrender purpose, if his taxable turnover is below the threshold exemption. The assessee can apply for waiver of penalty under Rule 7C of Service Tax Rules, 1994 for non filing of returns. The Department has given instructions for waiver of penalty for non filing of return where total taxable turnover was less than the threshold limit. The fact of non filing of return shall be mentioned in the undertaking to be given.
In case P&L or Balance sheet has not prepared the applicant may submit copies of Income tax returns for the said period. If income tax return has also not been filed the applicant should provide some evidence like bank statement to satisfy the office about correctness of reason for surrender.
- The assessee has to submit the complete set of hard copies within15 days of submission of online application; otherwise the application will be rejected;
- The assessee should submit the required documents with proper indexing of all enclosures;
- As far as possible all these documents will be verified by the Superintendent or Inspect at the time of their submission itself;
- In case of deficiency in submission of documents, the same shall be informed to the assessee at the time of receipt of the documents;
- The Superintendent may require further information like reconciliation of the income shown in Profit & Loss Account with the taxable income declared in ST-3 return; This reconciliation is not necessary if assessee taking centralized registration or in case of shifting of office from one jurisdiction to other jurisdiction or multiple registration;
- The Superintendent shall process the application for surrender of registration and after successful cancellation of the registration, will inform the assessee through e-mail;
- In case of any difficulty, Assistant Commissioner/Deputy Commissioner of the concerned Division may be approached for the resolution of grievance.
In case of the applicant who took service tax registration prior to 01.04.2010 and has not migrated to ACES system, it is not for them to migrate to ACES for surrender of the registration. They may apply for surrender of certificate by a manual application, along with other documents as required. The Department has issued instruction to liberally cancel the registration for assessee. In this case the intimation for cancellation shall be sent by post.
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