Service Tax Registration

[Samir Banerjee]

Dear Sir

One individual person rendering services as Management Consultancy Service (In House Consultancy ) under annual contract with a company let's assume ABC. The said ABC company has provided all infrastructure and office space within the company. The client is only rendering Management Consultancy Service only to this ABC company and ABC company making payment per month around 2.00 lacs to the person. The person is not raising any invoice neither the person obtained Service Tax Registration.The ABC company paying the person for the above In House Consultancy thru banking Channel

Now the query is whether in this situation the person liable to pay service tax since the person is not raising any invoice. ABC company remitting the payment on the basis of annual contract.

In case the person is liable to pay service tax whether or not issuing any Invoice, how he would be able to regularize the transaction in case service tax liable. If the person apply for the Service Tax Registration and start paying Service Tax, will he be liable to pay the Service Tax on the previous transactions one crossed limit of 10 lacs in one financial year.

Will department impose any penalty or interest due to the reason that person did not obtained Service Tax Registration when it was actually due. Is there any provision under which Service Tax Department waive off the Penalty and Interest?

The understanding of the person that as long as no invoice being raised, the person is not liable to pay the Service Tax. How far this understanding is correct and is there any legal implication will arise, if so what is the remedial solution to get relief from Penalty and Interest?

AI Summary

Service tax liability arises despite no invoice; obtain registration and deposit tax with interest; penalties may follow.
Service tax liability attaches to management consultancy receipts even without invoices once taxable receipts cross the exemption threshold; contract copies and bank statements are sufficient evidence. The provider must obtain registration and deposit the tax with interest to regularize past transactions. Penalties under the Finance Act apply for non-payment, non-registration and non-filing, though certain penalties may be waived by the competent officer if tax and interest are voluntarily deposited; interest is not waivable.