Registered but not provided services exceeding 10 lacs

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Akash Sharma (Querist)
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20 October 2015 Hi,

I provide accountant services to few of my clients. The fees i charge in whole year is less than 3 lacs in aggregate of all clients taken together.
I registered my self under service tax. But is it compulsory for me to charge service tax on every service i am providing?
Is there any benefit or exemption for registered service provider whose annual turnover does not exceed exemption limit.

Best Wishes
Akash

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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20 October 2015 Not compulsory to charge ST in the given situation.

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Akash Sharma

Akash Sharma (Querist)
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21 October 2015 Thankyou sir for your reply. Can you refer any section/ clause / case law under which such situation is covered?
As per my research once someone is registered under ST he has to compulsorily charge ST on all services he provide. If this understanding is true than it will be very harsh on small service providers like me who wants to register under service tax for opening bank accounts but cannot charge small clients all this.
I appreciate your interest in solving my query.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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20 July 2025 Hi Akash, good question — the service tax rules around this can be a bit tricky. Here's a clear explanation based on the service tax law before GST:

1. Compulsory Charging of Service Tax after Registration?
Once you are registered under service tax, you are generally required to charge service tax on all taxable services provided.
There is no explicit exemption just because your turnover is below the exemption limit after registration.
This is because registration means you have opted into the service tax system and are treated like any other taxable person.
2. Is There Any Exemption for Small Registered Providers?
Before registration, service providers with aggregate turnover below ₹10 lakhs (earlier ₹9 lakhs or ₹10 lakhs depending on date) were exempt from service tax under the “Small Service Provider Exemption”.
But once registered voluntarily, the exemption no longer applies to them because they have taken on the obligation to comply fully.
3. Your Case: Registered but Total Fees < ₹3 Lakhs
If you registered voluntarily (e.g., for opening bank accounts or other reasons), you must charge service tax on your services.
You cannot selectively choose not to charge service tax just because your turnover is below the exemption limit.
However, you may still claim input credit if applicable and file returns accordingly.
4. Relevant Legal References
Section 66B of the Finance Act, 1994: Defines the levy of service tax on taxable services.
Notification No. 30/2012-ST (Small Service Provider Exemption): Provides exemption from registration and payment of service tax if turnover < ₹10 lakhs (now subsumed under GST).
Circulars and Clarifications: ICAI and CBEC circulars explain that voluntary registration means service tax has to be charged.
Summary
Situation Obligation to Charge Service Tax?
Not registered & turnover < ₹10L No service tax, no registration needed
Registered voluntarily Must charge service tax on taxable services
Suggestion:
If you don't want to charge service tax, you may consider canceling your service tax registration if your turnover is below the threshold and you don’t require registration for other reasons.
Otherwise, you must comply fully with service tax laws.

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