Reg: registration of firm(training coaching)
This query is : Resolved
26 August 2013
Respected sir/ma'am,
I want to start one firm under sole proprietorship. At the initial stage, is it mandatory to register under shop and establishment act.? And I am expecting total service what I will provide will not be more than 5 lakhs. so is there any need to register under service tax? as service tax limit is 9lakhs.
Please provide your valuable guidance for the same.
Thanks
regards
I want to start one firm under sole proprietorship. At the initial stage, is it mandatory to register under shop and establishment act.? And I am expecting total service what I will provide will not be more than 5 lakhs. so is there any need to register under service tax? as service tax limit is 9lakhs.
Please provide your valuable guidance for the same.
Thanks
regards
Arun Kumar Singh
(Expert)
26 August 2013
Registration under shops and establishment act depaind upon the state policy. Upto 10 lakhs no need to take registration of service tax.
Message likes :
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27 August 2013
Sir How about the taxation part. Suppose I will give service worth of 4lakhs,so how tax will be calculated for meas individual? Please explain me taxation part if it is not registered under service tax.
Please reply.
Regards
Please reply.
Regards
20 July 2025
Great question! You're planning to start a sole proprietorship firm offering training/coaching services, and you have questions about:
Shop & Establishment registration
Service Tax (older regime – applicable pre-GST)
Income Tax implications
Let's address each of your queries in detail:
✅ 1. Shop & Establishment Act Registration
Yes, even for a sole proprietorship, registration under the Shops & Establishments Act is usually mandatory, especially if you’re:
Operating from a commercial place (or even a home office in some states)
Employing any staff
Applicability and procedure vary by State, so you should check your local municipal or labor office (or website) for the specific process.
✅ 2. Service Tax Registration (Pre-GST era)
Since your question refers to Service Tax (which was replaced by GST in 2017), here's what was relevant then:
Service Tax registration was not mandatory if:
Your annual turnover is less than ₹9 lakhs, and
You are not providing taxable services exceeding ₹10 lakhs.
If turnover crosses ₹9 lakhs, registration becomes compulsory, though tax is payable only when crossing ₹10 lakhs.
Since you're expecting turnover of ₹4 lakhs, no need for Service Tax registration (under the old law).
⚠️ Note: From July 1, 2017, GST replaced Service Tax. Now, if your aggregate turnover is below ₹20 lakhs (or ₹10 lakhs in special category states), GST registration is not mandatory.
✅ 3. Income Tax on ₹4 Lakhs (Individual – Sole Proprietor)
As a sole proprietor, your business income is taxed as personal income under the Income Tax Act.
Here's how your tax will be calculated for AY 2024-25 (FY 2023-24):
Income Type Amount
Gross receipts ₹4,00,000
Less: Expenses (rent, phone, staff, internet, etc.) ₹1,00,000 (example)
Net Business Income ₹3,00,000
Less: Deductions (e.g. 80C, 80D) If any
Taxable Income ₹3,00,000 (assumption)
Now, apply slab rates (for individuals ₹2.5L
Tax Payable Likely Nil with Sec 87A rebate or presumptive scheme
Shop & Establishment registration
Service Tax (older regime – applicable pre-GST)
Income Tax implications
Let's address each of your queries in detail:
✅ 1. Shop & Establishment Act Registration
Yes, even for a sole proprietorship, registration under the Shops & Establishments Act is usually mandatory, especially if you’re:
Operating from a commercial place (or even a home office in some states)
Employing any staff
Applicability and procedure vary by State, so you should check your local municipal or labor office (or website) for the specific process.
✅ 2. Service Tax Registration (Pre-GST era)
Since your question refers to Service Tax (which was replaced by GST in 2017), here's what was relevant then:
Service Tax registration was not mandatory if:
Your annual turnover is less than ₹9 lakhs, and
You are not providing taxable services exceeding ₹10 lakhs.
If turnover crosses ₹9 lakhs, registration becomes compulsory, though tax is payable only when crossing ₹10 lakhs.
Since you're expecting turnover of ₹4 lakhs, no need for Service Tax registration (under the old law).
⚠️ Note: From July 1, 2017, GST replaced Service Tax. Now, if your aggregate turnover is below ₹20 lakhs (or ₹10 lakhs in special category states), GST registration is not mandatory.
✅ 3. Income Tax on ₹4 Lakhs (Individual – Sole Proprietor)
As a sole proprietor, your business income is taxed as personal income under the Income Tax Act.
Here's how your tax will be calculated for AY 2024-25 (FY 2023-24):
Income Type Amount
Gross receipts ₹4,00,000
Less: Expenses (rent, phone, staff, internet, etc.) ₹1,00,000 (example)
Net Business Income ₹3,00,000
Less: Deductions (e.g. 80C, 80D) If any
Taxable Income ₹3,00,000 (assumption)
Now, apply slab rates (for individuals ₹2.5L
Tax Payable Likely Nil with Sec 87A rebate or presumptive scheme
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