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Registered Under Service Tax but turnover bellow exemption

partha (Tax Consultant) (48 Points)

05 October 2009

Please let me know...If a person is registered under Service Tax but his annual turn over is bellow Rs 10 Lacs. and did not charged ST while Billing. Do he need to pay ST and do he Need to File ST3-Return?

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6 Replies

EKALABYA TALUKDAR (SERVICE TAX CONSULTANT) (666 Points)
Replied 05 October 2009

DEAR PARTHA

IF YOU ARE REGISTERED UNDER SERVICE TAX CODE NO. YOU ARE AUTHORISED TO COLLECT SERVICE TAX TO WHOME YOUR ARE PROVIDING SERVICE. ALSO YOU HAVE TO PAY THE COLLECTED AMOUNT TO THE AUTHORITY AND YOU HAVE TO SUBMIT THE RETURN FOR YOUR PAYMENTS. NO MATTER WHETHER YOU ARE WITHIN THE Rs 10,00,000.00 BARRIER.

IF YOUR TURNOVER IS LESS THAN RS 10,00,000.00 FOR A YEAR, PLEASE SURRENDER THE SERVICE TAX REGISTRATION AND GET RID OF ALL THE ABOVE MENTIONED FORMALITIES

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Nitin Grover (CS) (1228 Points)
Replied 05 October 2009

Dear Friend

now you are registered with service tax authority and you will be treated as an Compolusiory Registered no matter whether u r registered as a a Volunt. or compul.

now you have to pay tax to govt and file Return(s) and its your liability to collect tax and pay to govt if u r not collecting then also u have to pay to govt on amt u r collecting from Coustmers

Shyam Lal Naik (Service) (6156 Points)
Replied 05 October 2009

Registration can not take away a substatial benefit. Non registration is not a pre condition to claim the benefit of the threshhold exemption limt.

If you are otherwise eligible and have never charged and / or collected service tax, you can not be compelled to charge and pay service tax. The exemption being optional, just write a letter to the range superintendent that you are availing the SSI exemption.

However, being a registered assessee, you are required to file nil return, till you cross the threshhold limit.

1 Like

Gautam Joshi (Partner) (361 Points)
Replied 05 October 2009

Hi partha,

I absolutely agree with Shyam Lal Naik. Registration and benefit of exemption notification is totally seperate matters.

Because you register yourself it does not mean you need to compulsory collect and pay tax to government. Upto 10 lakh of turnover, you are not required to bill or collect ST.

On a practical side, I suggest, if your total annual turnover is not more than 9 Lakh Rs. then surrender/cancel your registration. Why should you fall in crap of filling nil returns?

Best Regards.