Manpower supply service

[Narendra Soni]

Dear Expert,

Please clarify that now after 01-04-2015 Service tax liability 100% on service receiver on manpower service & Security service categary so need necessary to continue service tax registration number of service tax provider.

Should ST registration by service tax provider surrender or not.

[Ganeshan Kalyani]

The liability of service provider seizes after 01.04.2015 as the recipient is made liable to pay full service tax. The reverse charge is applicable only when the provider of service is individual, HUF, Firm, AOP, BOI and receiver of service is a body corporate. as far as your question whether service tax registration number of service provider should be surrender the provision is amended to do so. This is be because your assessment is pending. Till departmental audit is completed for all your previous year the registration no has to be continued. till such time nil return has to be filed.

[Ganeshan Kalyani]

A correction in the sentence in my reply. *no provision is amended. Wrongly I have mentioned as *provision is amended.

[Narendra Soni]

Dear Ganeshan.

Query is that whether service provider should apply for surrender his registration or not.After April 15,they are continue filling Nil return,whether audit done or not is not relevant It is a procedure to apply online and submit hard copies along with returns,department will verify and cancell the registration.Basics question is whether the registration is still required or not

[KASTURI SETHI]

Sh.Narendra Soni Ji,

It is very simple. Peruse the language of Section 69 of the Finance Act and Rule 4 of Service Tax Rules which reads as, " Every person liable to pay the Service Tax ..................make an application for registration to the Superintendent, Central Excise" You are not liable to pay Service Tax as liability has been entirely shifted to Service Receiver under RCM since April, 2015. Service being provided by you is taxable but 100% liability is on the recipient of service. Govt. has enhanced liability to 100% from 75% upon the recipient with some purpose. Therefore, in my views you are not required to retain Registration Certificate with you. There is no logic to retain the registration and filing 'NIL' ST-3 return indefinitely. I also agree with the reply of Sh.Ganeshan Kalyani. His views are equally important and crucial to be followed by you. He has expressed his views in totality in your interest. I also welcome the views of other experts, if they differ from me.

[ashish chaudhary]

You may surrender registration certificate is only this is only service provided by you

[KASTURI SETHI]

Sh.Ashish Chaudhary Ji,

You have rightly opined.That is but natural. I think he is providing only this service (Manpower) that is why he is seeking the opinion for surrender of registration certificate.

[Ganeshan Kalyani]

Dear Kasturi sir thanks for backing by view which is based on one of my experience in this field.

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

Welcome Sir

AI Summary

Reverse charge liability on service recipient shifts registration and filing obligations for manpower supply services, affecting surrender decisions. 100% liability for manpower supply and security services has been placed on the service recipient under the reverse charge mechanism, so providers who only render such services are not required to discharge the tax. Where a provider exclusively supplies services subject to recipient liability, retention of registration and ongoing nil return filing is unnecessary and surrender of registration may be appropriate. However, if departmental audits or pending assessments exist, providers should maintain registration and continue filing until verification and assessments are completed, since cancellation follows departmental scrutiny after submission of surrender application and returns.