Service Tax Registration in Kolkata

What is Service Tax ?

Service tax is, as the name suggests, a tax on Services. It is a tax levied on the transaction of certain services specified by the Central Government under the Finance Act, 1994.

It is an indirect tax (akin to Excise Duty or Sales Tax) which means that normally, the service provider pays the tax and recovers the amount from the recipient of taxable service.

The current rate of Service Tax is 12.36%

Who is required to get Registration in Service Tax

Every person liable to pay service tax is required to register by making an application to the Superintendent of Central Excise in terms of section 69. The service provider before registering shall ensure that the basic exemption limit for registration available to all service provider has been crossed.

The present notified limit at present is Rs. 10 lakhs, However Branded service providers i.e. providing services under brand name or trade name of others would not be admissible for the exemption.

The exemption from registration would not be available for a person who is liable to pay service tax as receiver of services. Moreover, the aggregate value of taxable services provided in the preceding financial year should not exceed Rs. 10 lakhs in order to avail the benefit of exemption.

Who is liable to pay service tax?

Normally, the ‘person’ who provides the taxable service on receipt of service charges is responsible for paying the Service Tax to the Government (Sec.68 (1) of the Act). However, in certain cases , the receiver of the Services is responsible for the payment of Service tax :

How to decide whether Service Tax is payable by a person?

A. If you are engaged in providing a service to any person, please check:-

(i) Whether the service rendered by you is falling under the scope of any of the taxable services listed in the Appendix-1.; and
(ii) Whether there is a general or specific exemption available for the category of service provided under any notification issued under section 93 of the Finance Act, 1994.
(iii) Whether you are entitled to the value based exemption available for small service providers
(iv) Whether the service charges were received for the services provided or to be provided.

In case the service provided by a person falls within the scope of the taxable services and if such service is not fully exempted, the service tax is payable on the value of the taxable service received, subject to the eligible abatements, if any

B. If you are availing the services of the service provider, please check:-

a. Whether the service received by you is falling under the scope of any of the services where the recipient of the service is liable to pay Service Tax in terms of Section 68(2) of the Act read with Rule 2(d) of the Service Tax Rules, 1994

b. In case the service received by recipients of such service is falling under the scope of any of the taxable services defined under section 65 of the Finance Act, 1994, the recipients of the service shall pay Service Tax after considering specific exemptions/abatements admissible, if any.

c. Please note that the value based exemption for small scale service providers under Notification No.6/2005 ST dated 01.03.2005 as amended is not admissible to such recipients of taxable services.

Is there any provision for centralized registration?

Service providers having centralized accounting or centralized billing system who are located in one or more premises, at their option, may register such premises or office from where centralized billing or centralized accounting systems are located and thus have centralized registration.

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