Registration of Service tax -Criteria

[Anil Kumar]

Dear Sir,

We would like to know the criteria of service tax registration, what is the turn over limit to register is it above ₹ 10laks turn over or more?.

Our company is been doing metalising and stacking of finished products in boxes and sealing for a company, now last year turnover has crossed to ₹ 10Lakhs i.e. year 2014-15.

regards

aneel Kumar M

[KASTURI SETHI]

One has to apply for registration of Service Tax as soon as turnover exceeds 9 lakhs in a financial year as per Notification No.27/2005-ST dated 7.6.2005 (effective from 16.6.2005) as amended vide Notification No.10/2008-ST dated 1.3.2008.

[Anil Kumar]

Dear Sir,

So we now come under service tax registration, though next year less than 9 lakhs, if in case.

regards

aneel

[KASTURI SETHI]

If turnover is less than 1o lakhs in 2015-16, you can again avail small scale exemption next year. If turnover is less than 9 lakhs, you can surrender registration and apply for registration again if required.

[YAGAY and SUN]

Dear Anil,

In addition to the reply submitted by respected Kasturi Ji, under partial reverse charge or Full reverse charge mechanism, service provider can claim the benefit of threshold limit but the recipient of services (the person liable to pay the service tax) cannot as there is no such provision in the Finance Act, 1994 read with Rules made thereunder.

Regards,

YAGAY and SUN

(Management, Business & Indirect Tax Consultants)

[KASTURI SETHI]

I agree with reply dated 20.9.2015 of M/s. YAGAY and SUN in toto.

AI Summary

Service tax registration threshold: mandatory registration above threshold; small scale exemption and reverse charge treatment differ for provider and recipient.
Registration for service tax is required when an assessee's taxable turnover in a financial year exceeds the notified threshold; if turnover falls below the threshold in a later year the assessee may avail small scale exemption, surrender registration and reapply when needed. Under reverse charge mechanisms the service provider may claim threshold exemption for registration, but the recipient liable to pay tax under reverse charge may not claim that threshold benefit under the statute and rules.