Registration requirement

[Dipak Rajpara]

Dear All Participants,

Help me on the registration requirement with service tax authorities when a jobworker receives all the business under jobwork challan under rule 4 (5) of excise (Previously known as 57F 4. The process does not amount to manufacture under central excise.

Is the jobworker required to get registration under SERVICE TAX Authorities

Thank you all in advance

[CASeetharaman KC]

If the process does not amount to manufacture then provision of services would be a fait accompli or an eventuality provided the service does not fall under the exempted category or negative list. The threshold exemption limit of Rs 10 Lakhs for small service providers for a financial year should be considered after which the service would become taxable. Registration would be required on the turnover crossing Rs 9 lakhs. These figures would not be much relevant if the turnover is on the higher side and it would be better to take registration as soon as the limit of Rs 9 Lakhs is crossed  to avoid complications. If the service does not come under the exempted category or negative list  then service tax would be payable at 12.36%. A question which arises in this case is that if the job work was being done earlier also (prior to the negative list method) how was this service escaped the payment of service tax till date? This question may have to be studied and addressed properly otherwise one can expect demand for earlier periods also

AI Summary

Service tax registration requirement: jobwork supplying taxable services requires registration once threshold turnover is exceeded.
Whether a jobworker performing processes that do not amount to manufacture must obtain service tax registration when the activity constitutes a supply of services outside the exempted categories or negative list; registration is required on crossing the prescribed registration threshold and earlier-period treatment should be reviewed to assess exposure to retrospective demands.