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query on service tax number

This query is : Resolved 

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

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.

thanx sir i too believe that he is pocketing the taxes

You are most welcome.

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