Procedure for Surrender and Cancellation of Service Tax Registration. - Service Tax - 18/2013

OFFICE OF THE COMMISSIONER SERVICE TAX-I MUMBAI 5th FLOOR, New Central Excise Building , 115, M.K.Road , Churchgate, Mumbai -400020 TRADE NOTICE NO : 18 /2013-ST dated 19-12-2013 Sub :- Procedure for Surrender and Cancellation of Service Tax Registration. Attention of the trade is invited to the provisions of sub-rules 7 and 8 to Rule 4 of the Service Tax Rules, 1994 , which provides for surrender of registration certificate in the case of an assessee who ceases to provide the taxable service for which he is registered. The Superintendent of Central Excise after ensuring that the assessee has paid all the Service Tax dues may cancel such registration certificate. 2. The Commissionerate has issued a Trade Notice No. 3/2007-ST dated 30.03.2007 explaining the modalities for surrender of the registration certificate. It is noticed that this Commissionerate has more than one lakh registered assessee cut of which about 40-45% are only active i.e filing their returns and paying tax. Taking the note of the fact that large number of assesses are inactive and number of applications are pending for surrender/cancellation of service tax registration, a need arose for issuing fresh guidelines on surrender/cancellation of the service tax registration. Therefore, following guidelines are issued detailing the procedure to be followed : 3. Broadly, surrender/cancellation of the service tax registration is applied for following reasons:- a) Assessee's turnover is below the threshold limit. b) Change in the constitution of assessee, say from partnership to company or amalgamations. c) Death of proprietor. d) Assessee closing down his taxable service business. e) Assessee has taken centralized registration and hence wants to surrender his other multiple registrations pertaining to the branches. f) Assessee has shifted its office from the jurisdiction of one Division/Commissionerate to another and instead of requesting for change in the location code and premises code of the assessee, a fresh registration has been taken at the new address. Therefore a need arises for surrender of the old registration. g) Due to technical error in the system, the assessee has been issued multiple registrations for the same address. In that case, the additional registrations are required to be surrendered. 4. All the assessees who wish to surrender their registration certificates shall file their application on-line using the ACES module on www-.aces.gov.in. On successful filing of the online application the assessee shall submit the copies of documents mentioned at para 5 along with signed copy of print out of the application generated by the ACES System to the jurisdictional/Group Superintendent or superintendent(s) of 'Centralized Surrender Cell' in the concerned Division office. For, surrender application submitted by an assessee who had obtained registration prior to 01.04.2010 and not migrated to ACES, requirement of online filing of application has been done away with and procedure given in para 8.1 below may be referred. 5.1 All the assessees falling under category (a) to (g) of Para 3 are required to submit following documents: (i) Application Form Undertaking for surrender of Service Tax Registration (Annexure-I) (ii) 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. In case the assessee has not filed ST-3 returns for the period mentioned above, then it is not necessary for him to file the fresh return for surrender purpose if his taxable turnover is below the exemption limit. He can apply for waiver of penalty under Rule 7C of STR for non-filing of returns. Instructions have been issued for waiver of penalty for non filing of return where total taxable turnover was less than threshold limit. The fact of non-filing of return should be clearly mentioned in the undertaking. (iii) Copies of Profit 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. However, if Balance Sheet or Profit Loss Statement has not been prepared, the applicant may submit copies of Income Tax Return for the said period. If said return has also not been filed then applicant should provide some evidence like Bank Statement to satisfy the office about correctness of reason for surrender. [Not required for category (e) (g)] (iv) Details of Show Cause Notice pending adjudication, details of confirmed demands, details of court cases, details of audit conducted, etc. as per Annexure-II. 5.2 In case of an assessee failing under category (c) of para 3 above, the death certificate of the proprietor may also be enclosed along with the application form. 5.3 In case of change of constitution [category (b) of para 3] the necessary documents like Partnership deed or Articles of Association etc. showing change of constitution may be enclosed along with application for surrender. In case of merger or acquisition necessary documents such as Order passed by the Hon'ble High Court or Article of Association to that effect, may be enclosed along with application of surrender. 5.4 In case of assessee taking centralized registration [category (e) of para 3], the copy of centralized registration certificate, showing the premises for which surrender application is being submitted, should also be enclosed along with the application for surrender. 5.5. For cases covered by category (g) of Para 3 above, copy of registration certificate for which the applicant wants to continue the registration should also be submitted along with the application for surrender. 6. After submission, of the required documents personally or by post, the Superintendent may require further information like reconciliation of the income shown in the Profit Loss Account with the taxable income declared in ST-3 return. However, reconciliation information would not be necessary in case of assesse taking centralized registration or in case of shifting of office from one jurisdiction to other jurisdiction or in case of technical error resulting in multiple registration or in case of turnover as per income statement/Profit Loss account being below exemption limit. 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 Inspector at the time of their submission itself. In case of deficiency in submission of documents, the same shall be informed to the assesse A at the time of receipt of the documents. It may be noted that if the assessee fails to submit the complete set of hard copies within 15 days of submission of on-line application, his application is liable to be rejected. 8.1 In case the applicant has taken service tax registration prior to 01.04.2010 and has not migrated to ACES system, in that case it is not necessary for them to migrate to ACES for surrender of their; registration. Therefore -they can apply for surrender by a manual application, alongwith other documents as required without filing on-line surrender application. Instruction have been issued to liberally cancel the registration for assessee who had taken registration in the 'past when there was no threshold limit. Further, in those case the intimation for Cancellation shall be sent by post. 8.2 The assesse who have misplaced the User-id Password for transacting in ACES may approach the 'Help Desk' of the respective Division along with filled in application Form (format enclosed as Annexure-III) for generating T-pin. Using the T-pin generated by the System which will be received by the applicant through e-mail; 9. The Superintendent shall process the application for surrender of registration and after successful cancellation of the registration will inform the assesse through e-mail. 10. In case of any difficulty, Assistant Commissioner/Deputy! Commissioner of the concerned Division may be approached for the resolution of grievance. 11. Instructions given in the earlier Trade Notice No 03/2007-ST dated 30/3/2007 stands superseded by this new Trade Notice. 12. Surrender Application shall be accepted in person between 3:00 to 5:00 PM in the division. 13. All the trade Associations are requested to bring the contents of this Trade Notice to the attention of their members, in particular and the trade in general. Encl: Annexure-I to III (SUSHIL SOLANKI) COMMISSIONER SERVICE TAX-I, MUMBAI