How to change proprietorship into partnership in service tax

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Neha Agarwal (Querist)
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30 April 2015 One of my client recently has got service tax registration as proprietor in April 15, Now he wants to change proprietor ship into partnership firm with two partners(including him). I want to know, would I surrender service tax no of proprietor to CBEC & apply for new service tax registration for partnership or can make online amendments in ST-1.

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CA AnKiT BoHrA (AB)

CA AnKiT BoHrA (AB) (Expert)
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03 May 2015 yes you wil because service tax no are based on pan nos.. if u had seen this...

so as a partnership firm has its own ST no and pan no... u need to change it...

stil u can wait for more expert views

Neha Agarwal

Neha Agarwal (Querist)
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04 May 2015 Ankit ji, I registered online by filling ST-1 of my client as proprietor. I want to know, whether I have to surrender the registration no of proprietor to CBEC and file fresh ST-1 for new registration or no need to surrender registration no only need to make alteration in ST-1 on www.aces.gov.in to get fresh registration.

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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28 July 2024 To change the status from a proprietorship to a partnership firm under Service Tax in India, you need to follow a specific procedure. Here's a detailed step-by-step guide on how to handle this transition:

### **1. Surrender the Existing Service Tax Registration**

Since the nature of the business entity is changing from a proprietorship to a partnership, the existing Service Tax registration under the proprietor's name must be surrendered. This is because Service Tax registration is entity-specific, and a new registration is required for the partnership firm.

#### **Steps to Surrender Service Tax Registration:**

1. **Log in to the ACES Portal:**
- Visit the [ACES Portal](https://www.aces.gov.in) and log in using the credentials associated with the existing proprietorship registration.

2. **Navigate to the Surrender Section:**
- Go to the 'Service Tax' section.
- Look for an option related to 'Surrender of Registration' or 'Cancellation of Registration'.

3. **Fill Out the Surrender Form:**
- Complete the online surrender form with details such as the reason for surrender (change of business structure from proprietorship to partnership).
- Submit the form and ensure you receive a confirmation receipt.

4. **Submit Required Documents:**
- You may need to submit supporting documents, such as a partnership deed, to the local Service Tax office.
- Check for any additional requirements as specified by the CBEC or local Service Tax authorities.

5. **Confirmation:**
- Await confirmation from the Service Tax department regarding the surrender of the old registration.

### **2. Apply for New Service Tax Registration**

Once the old registration has been surrendered, you need to apply for a new Service Tax registration under the partnership firm.

#### **Steps to Apply for New Service Tax Registration:**

1. **Prepare Documents:**
- Partnership Deed
- PAN of the Partnership Firm
- Proof of Address (for the partnership firm)
- Bank Account Statement
- Any other documents as required by the CBEC or local office

2. **Log in to the ACES Portal:**
- Visit the [ACES Portal](https://www.aces.gov.in) and log in using your credentials.

3. **Fill Out ST-1 Form for New Registration:**
- Go to the 'Service Tax' section.
- Choose 'New Registration' and fill out the ST-1 form with details of the partnership firm.
- Provide details about the partners and the business.

4. **Submit the Application:**
- Review the information entered in the ST-1 form.
- Submit the form online and obtain the acknowledgment receipt.

5. **Verification:**
- The Service Tax department may request additional documents or information. Ensure that you respond promptly to any queries.

6. **Receive New Registration Number:**
- After verification, you will receive a new Service Tax Registration number for the partnership firm.

### **Important Notes:**

- **No Direct Amendment:** Since the change involves a shift in the legal entity, direct amendments in the existing registration are not applicable. You need to surrender the existing registration and apply afresh.
- **Transition Period:** Ensure that there is no gap in the Service Tax compliance during the transition. Properly manage the timing of surrendering the old registration and applying for the new one.
- **Consultation:** It may be beneficial to consult a tax professional or advisor to ensure all requirements are met and the transition is smooth.

By following these steps, you will be able to transition from a proprietorship to a partnership firm with the correct Service Tax registration in place.