query on service tax number

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This query is : Resolved

Kumar Gaurav (Querist)

16 April 2016 mr. a is running fast food business frm a shop. he is charging service tax as well as vat also frm customers. whereas invoice shows service tax and vat as Applied for. my query is that whether it is possible to charge service tax and vat frm custoners without having both? he is running the same since last 3 or 4 months. thanks

Suresh Ramaswamy

Suresh Ramaswamy (Expert)

17 April 2016 Any business entity is entitled to apply for and collect service tax and VAT. The only criterion is the tax so collected must be deposited to the credit of the Treasury. In case of VAT, there is a provision for payment of tax even pre-registration, quoting the application number. In Service Tax, however, there is no such provision.

In Service Tax the registration is granted within 48 hours, so applied for status cannot continue for 2/3 months. The hard copies should subsequently be submitted to the Department, else the registration is liable to be cancelled.

The VAT registration is granted within one month (21 working days) subject to submission of hard copies of all documents.

Collection of indirect taxes without registration is a punishable offence and non-deposit of the tax so collected is a criminal offence inviting prosecution and imprisonment. However, taxes can be collected and deposited once an application is made. I feel that Mr.A is fraudulently collecting these taxes and pocketing the same.

Message likes : 1 times

Kumar Gaurav

Kumar Gaurav (Querist)

17 April 2016 thanx sir i too believe that he is pocketing the taxes

Suresh Ramaswamy

Suresh Ramaswamy (Expert)

17 April 2016 You are most welcome.

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