SURRENDER OF SERVICE TAX REGISTRATION

[Dr. Sanjiv Agarwal]

Rule 4 of the Service Tax Rules, 1994 specifies the procedure for registration under service tax. As per Rule 4(7), 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 application 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 assessees can surrender the registration certificate in any of the following circumstances-

1. Death of proprietor
2. Ceases to provide the taxable service
3. Change in the constitution of business
4. Turnover is below the threshold limit
5. Shifting the business premises from one jurisdiction to another jurisdiction
6. Applying for centralized registration by surrendering the single registration of other offices / branches.

Trade Notice No. 18/2013-ST, dated 19.12.2013 issued by the office of the  Commissioner of Service Tax, Mumbai – I explains the procedure for surrender and cancellation of service tax registration.  The surrender of registration is of two types –

• Assessee who has obtained registration and migrated to ACES and
• Assessee who obtained registration prior to 01.04.2010 and has not migrated to ACES.

           Assessees are required to apply for surrender of Service Tax registration online. The procedure for online surrender is as follows:

1. The application for surrender of registration certificate shall be filed online using the ACES module on www.aces.gov.in
2. The assessee who has misplaced the User-id and password for transacting in ACES may approach the ‘Help Desk’ of the respective division alongwith filled in application for generating T-Pin
3. On successful filing of the application, the assessee is to take print out of the application generated by ACES
4. The said printed application is to be signed by the assessee and to be submitted    to the jurisdictional Superintendent or Superintendent(s) of ‘Centralized Surrendered Cell’ in the concerned Division either in person or by post along with the following documents-

• Application form and undertaking for surrender of service tax registration number
• 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 Profit and Loss 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 for 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.

v)    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 fact of non-filing of return shall be mentioned in the undertaking to be given.

vi)  In case Profit and Loss Account and 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 re-conciliation 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 or Deputy Commissioner of the concerned division may be approached for the resolution of grievance.

For applicants having registration prior to 01.04.2010  who have not migrated to ACES system, it is not necessary to apply for online and then surrender registration certificate online. They may apply for surrender of certificate by way of 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.

Discussions to this article

[CA Seetharaman K C]

I have done one surrender practically and they even ask for copies of payment challans.They even want individual income tax returns of all partners.Even if the firm is a partnership they ask for total balance sheet and P/L account even though only the registration for one branch is being surrendered.And the most important point of all is that you need to keep filing NIL return till you get confirmation that the registration is cancelled

[Dr. Sanjiv Agarwal]

This is certainly asking for too much at the cost of harassment of assessees

​Sanjiv Agarwal

[CA Seetharaman K C]

Yes it is.Also very important point is that the application for surrender is supposed to be uploaded online and the asssessee has to be extra careful to take print out of the acknowledgement of receipt of surrender application as this is the only proof he has to signify that he has filed the surrender apapplication.In my case the site got disconnected and I could not get the print out and I had to request for a copy from the officer which is again an uphill task.The safest thing to do to avoid complications is to keep filing NIL return till you get a confirmation that your registration has been cancelled. I am yet to receive such a confirmation . Also another point to note is that one can find ST3 returns,Registration details in the system by querying for the same. No such updates are available regarding the status of cancellation of registration. The department should probably look into this aspect

[Dr. Sanjiv Agarwal]

I agree.