Is service tax need to collect to professors

This query is : Resolved

Neerav Yogesh Shah (Querist)
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01 August 2011 Mr X is a Chemistry Professor in one of the reputed coaching classes. His Gross Receipts is more than 18 lacs.

Also his TDS is being deducted under Sec 194J as Professional Fees under Income Tax Act.

Is he liable to collect service tax & pay to government?
If Yes, Under which service category he need to get himself register & collect Service Tax?

rajula gurva reddy

rajula gurva reddy (Expert)
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05 August 2011 Unless the coaching centre belongs to the professor, he/she need not pay any Service TAx on remuneration received from the coaching centre under the category of Commercial Training or coaching Service.

Neerav Yogesh Shah

Neerav Yogesh Shah (Querist)
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11 August 2011 Mr X does not owns any coaching centre.

Also Mr X is being appointed on contract basis so my query is under which category of service he is liable to get himself register

plz quide me its urgent

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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01 August 2024 Under the Service Tax regime (before the implementation of GST in India on July 1, 2017), certain services provided by individuals, including teaching and professional services, were subject to Service Tax if they crossed the threshold limit of gross receipts.

### Applicability of Service Tax

1. **Threshold Limit**:
- Service Tax was applicable if the gross receipts from services exceeded ₹10 lakhs in a financial year.
- Since Mr. X's gross receipts are more than ₹18 lakhs, he would be liable to pay Service Tax.

2. **Nature of Services**:
- Mr. X is a Chemistry Professor providing professional services on a contract basis and does not own a coaching center.

### Service Category for Registration

1. **Category**:
- Mr. X's services would fall under the category of **"Education Services"** or more specifically **"Commercial Training or Coaching Services"**. This category includes services provided by coaching centers, private tutors, and similar educational services.

2. **Professional Services**:
- Alternatively, if his services are being classified under professional fees under Section 194J of the Income Tax Act, they might also be considered under **"Consulting Services"**.

### Registration Process

1. **Registration**:
- Mr. X needs to register for Service Tax with the appropriate tax authorities. The registration category would generally be **"Commercial Training or Coaching Services"** or **"Consulting Services"**, depending on the detailed classification of his services.

2. **Collection and Payment**:
- After registration, Mr. X needs to collect Service Tax from his clients (the coaching classes) and pay it to the government. The rate of Service Tax was generally 15% (including cess) before the introduction of GST.

### Compliance and Returns

1. **Invoice**:
- Mr. X should issue invoices to the coaching classes, mentioning the Service Tax amount separately.

2. **Payment**:
- The collected Service Tax should be paid to the government on a monthly or quarterly basis, depending on the category and size of the business.

3. **Filing Returns**:
- Mr. X would need to file Service Tax returns, typically on a half-yearly basis, detailing the services provided and the tax collected.

### Transition to GST

After July 1, 2017, GST replaced Service Tax. Under GST:

1. **Threshold Limit**:
- The threshold limit for GST registration is ₹20 lakhs (₹10 lakhs for special category states).

2. **Service Classification**:
- Under GST, Mr. X's services would fall under **"Educational Services"**.

3. **GST Rates**:
- Educational services provided by individuals or institutions are subject to GST, depending on the specific nature and context of the service.

### Conclusion

Mr. X, as a Chemistry Professor with gross receipts exceeding ₹18 lakhs, was liable to collect and pay Service Tax under the **"Commercial Training or Coaching Services"** category. After the implementation of GST, he needs to register under GST if his receipts exceed ₹20 lakhs and comply with the relevant GST regulations.

For precise compliance and to ensure accurate classification, it’s advisable to consult with a tax professional or GST consultant.

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