Service Tax Registration

Service Tax is an indirect form of tax specified by the Central Government under the Finance Act, 1994. The registration of service tax is necessary for all the business entities providing services in India.

The service provider collects the taxable amount and recovers the same from the recipient of the taxable service and pays it to the Government. Service Tax is levied on the value of the taxable service which includes Education Cess and Secondary and Higher Education Cess on the service tax amount.

Service Tax registration is compulsory for every person or business entities that provides a taxable service of value exceeding Rs.9 lakhs in the previous financial year. The registration is necessary for the identification of the assesse, depositing service tax, filing service tax returns and also undertaking numerous procedures required under the Finance Act, 1994.

Failures to obtain the registration of service tax would attract penalties around Rs.5,000 or Rs. 2,000 under the section 77 of the Finance Act, 1994.

The service provider should be registered with the Government if the preceeding year’s turnover is above Rs. 9 lakh. Collection must be levied at the rate of 15%, when the turnover of the business exceeds Rs. 10 lakh. Once service tax is collected from the customers, even if only for a month, the service provider must continue to collect service tax, irrespective of the fact whether the revenues fall below Rs. 10 lakh per annum. Small scale service providers providing taxable services of value less than Rs.10 lakhs annually are wholly exempted from service tax and service tax registration.

Service Tax is to be paid through designated branches or online, once every quarter by partnership firms, sole proprietors or LLPs and monthly by all other entities. Service tax returns must be filed twice a year.

The due dates are October 25 for the period between April 1 to September 30 (1^st half) and April 25 for the period between October 1 to March 31 (2^nd half) every year.

Service tax is not applicable for services exported from India. Hence, exporters of service do not need to pay service tax. However, it is recommended for service exporters to attain service tax registration.

• No verification of the Service Tax Registration.
• Mandatory to Pay 15% on your receipts.
• Filing of returns twice a year (half yearly).
• Helps to open Bank Account (in case of Proprietorship).
• Service tax registration adds value to the business entity internationally.

• Identity, address proofs and PAN cards along with four passport-sized photographs of the directors or the partners must be submitted.
• Private limited companies must submit the MOA, AOA, Form 18, Form 32 and Certificate of Incorporation, while the partnership firms must submit the Partnership Agreement or deed to the concerned government department. The rental agreement for the office address, if taken on rent, along with the electricity bill must be attached along.
• It will then be filed and submitted to the authorities.
• The application will then be processed by the department and it might involve a physical inspection as well. The Service Tax Number will be issued after approval with a certificate.
• The due dates for depositingservice tax to the government is 5th of every month for the month ended, if payment is done offline and 6th of every month for previous month, if the payment mode is Online.

Note:

Service tax deposit for March (offline and online); date is 31st March, since it’s the end month of the financial year.

• For April to September(1st Half) due date is 25th October every year.
• For October to March(2nd Half) due date is 25th April every year.