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Service tax inquiry

Rahul (manager) (25 Points)

29 July 2010

Hello,

I have a question regarding service tax.

I My turnover for 2008-2009 was 12 lac approx and for 2009-2010 (last financial year) was 12.5 lac.

I am a software developer and providing software services to foreign clients, so all my income is coming under Service tax Exempt.

Please let me know do I require Service tax registration number?

because i have no service tax to pay (export of s/w services to foreign clients is exempted under service tax).

If yes, Service tax number is required in my case, then will there be any late fee or charge due to not applied for last 2 years. Also will this affect my IT return (means any change in that also due to this)/

Please let me know asap if possible.

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1 Replies

Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 30 July 2010

Dear rahul,

For determining whether a person liable for service tax registration or not depends upon the value of taxable service provided during the last financial year. Taxable service also includes Service exported in terms of Export of service rules, 2005. There is no direct case law in support of this.

However CBEC clarifies by the circular no. 868/6/2008 dated 9.5.08 that exempted service includes non taxable service also. Further clarified that Export of Services without the payment of service tax are not to be treated as exempted service. Although the circular issued in support of rule 6 of the cenvat credit rules 2004, it equally applies to service tax as the cenavt credit rules are applicable for service providers as well.

With all the details mentioned above, it is much more clear that service exported is also part of taxable service and should be considered for determining whether person liable for registration or not.

In your case, value of services provided during 2008-2009 was Rs.12 lakhs, thus u had to get registration within 30 days from the date when aggregate value of taxable services exceeds Rs.9 lakhs in the financial year.

As per Section 77, failure to take the registration would attract the penalty which is higher of :

1. Rs.200 per day from the date when Value of taxable service exceeded Rs.9 lakhs till the date of application made for registration.

2. Rs.5000

It won't affect your IT return or assessment.

Regards,

Manoj