Service provider registration
This query is : Resolved
08 May 2014
Is SERVICE PROVIDER under reverse charge mechanism require to get himself registered under service tax if service receiver is require to pay 100% of service tax?
Note- Service provider value of taxble service has crossed Rs 10 lacs.
E.g-Insurance agent(service provider)
Note- Service provider value of taxble service has crossed Rs 10 lacs.
E.g-Insurance agent(service provider)
08 May 2014
NOT REQUIRED S TAX REGISTRATION CERTIFICATE
NOT APPLICABLE TO U UNDER RCM NOTIFICATION NO 30/2012-ST
ONLY INSURANCE SERVICE IS SERVICE RECEIVER LIABILITY OF S TAX
NOT APPLICABLE TO U UNDER RCM NOTIFICATION NO 30/2012-ST
ONLY INSURANCE SERVICE IS SERVICE RECEIVER LIABILITY OF S TAX
23 July 2025
Your question is about whether a **service provider** (like an insurance agent) is required to **register under Service Tax** if:
* The service is covered under the **Reverse Charge Mechanism (RCM)**
* The **entire 100% service tax is payable by the service recipient**
* The **service provider’s taxable services exceed ₹10 lakh**
---
## ✅ **Short Answer (as of May 2014):**
> **Yes, the service provider is still required to register under Service Tax** if their **taxable turnover exceeds ₹10 lakh**, even **if the tax liability is entirely on the service recipient under reverse charge**.
---
### 🔍 **Explanation:**
Under **Notification No. 30/2012 – Service Tax dated 20.06.2012**, certain services (like those provided by insurance agents, GTA, advocates, etc.) are fully covered under **reverse charge**, meaning:
* **Service recipient (e.g., insurance company)** pays **100% of the service tax**
* **Service provider does not collect or pay service tax**
However, as per **Rule 4(1) of the Service Tax Rules, 1994**:
> “Every person liable to pay the service tax or required to take registration under the Act shall make an application to the Superintendent of Central Excise...”
And **as per Rule 2(1)(d)** of the Service Tax Rules, a person is "liable to pay" if they **provide taxable services exceeding the exemption limit** (₹10 lakh), **even if not liable to deposit tax themselves**.
---
### ⚖️ CBEC Clarification:
The CBEC (now CBIC) has clarified through various FAQs and trade notices that:
> If the **aggregate value of taxable services exceeds ₹10 lakh in a financial year**, the **service provider must obtain registration**, even if **they are not liable to pay tax due to reverse charge.**
---
### 📌 In Your Example:
* **Insurance agent** provides services to **insurance company**
* Covered under **full reverse charge** → insurance company pays 100% service tax
* But since insurance agent’s taxable value > ₹10 lakh → **registration is mandatory**
---
### 🚫 What is NOT required:
* The service provider **need not file service tax returns** showing liability
(returns may still be filed as NIL or for information purposes only)
* **No service tax needs to be paid by the service provider**
---
### ✅ Summary:
| Question | Answer |
| -------------------------------------------------------- | ------------------------------- |
| Is service provider liable to pay service tax under RCM? | ❌ No |
| Must service provider register if turnover > ₹10 lakh? | ✅ **Yes** |
| Must service provider file returns? | ⚠️ Not mandatory, but advisable |
| Can penalty apply for non-registration? | ✅ Possibly, if audited |
---
Let me know if you'd like a one-page compliance checklist for reverse charge services.
* The service is covered under the **Reverse Charge Mechanism (RCM)**
* The **entire 100% service tax is payable by the service recipient**
* The **service provider’s taxable services exceed ₹10 lakh**
---
## ✅ **Short Answer (as of May 2014):**
> **Yes, the service provider is still required to register under Service Tax** if their **taxable turnover exceeds ₹10 lakh**, even **if the tax liability is entirely on the service recipient under reverse charge**.
---
### 🔍 **Explanation:**
Under **Notification No. 30/2012 – Service Tax dated 20.06.2012**, certain services (like those provided by insurance agents, GTA, advocates, etc.) are fully covered under **reverse charge**, meaning:
* **Service recipient (e.g., insurance company)** pays **100% of the service tax**
* **Service provider does not collect or pay service tax**
However, as per **Rule 4(1) of the Service Tax Rules, 1994**:
> “Every person liable to pay the service tax or required to take registration under the Act shall make an application to the Superintendent of Central Excise...”
And **as per Rule 2(1)(d)** of the Service Tax Rules, a person is "liable to pay" if they **provide taxable services exceeding the exemption limit** (₹10 lakh), **even if not liable to deposit tax themselves**.
---
### ⚖️ CBEC Clarification:
The CBEC (now CBIC) has clarified through various FAQs and trade notices that:
> If the **aggregate value of taxable services exceeds ₹10 lakh in a financial year**, the **service provider must obtain registration**, even if **they are not liable to pay tax due to reverse charge.**
---
### 📌 In Your Example:
* **Insurance agent** provides services to **insurance company**
* Covered under **full reverse charge** → insurance company pays 100% service tax
* But since insurance agent’s taxable value > ₹10 lakh → **registration is mandatory**
---
### 🚫 What is NOT required:
* The service provider **need not file service tax returns** showing liability
(returns may still be filed as NIL or for information purposes only)
* **No service tax needs to be paid by the service provider**
---
### ✅ Summary:
| Question | Answer |
| -------------------------------------------------------- | ------------------------------- |
| Is service provider liable to pay service tax under RCM? | ❌ No |
| Must service provider register if turnover > ₹10 lakh? | ✅ **Yes** |
| Must service provider file returns? | ⚠️ Not mandatory, but advisable |
| Can penalty apply for non-registration? | ✅ Possibly, if audited |
---
Let me know if you'd like a one-page compliance checklist for reverse charge services.
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