29 December 2011
Our company have two unit. Both are registered in service tax with diff reg no 001 & 002. If one unit provides service to another unit then wheather service tax is payable on it or not.
31 December 2011
sir,when there is no any relationship of service receiver & service provider then why service tax is payable on providing the service from one unit of a company to another unit of same company?
24 July 2025
Great question! Here’s the clarity on **service tax on services provided between two units of the same company** but having **different Service Tax registrations**:
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### Key points:
1. **Are the two units distinct taxable entities?**
* If both units have **separate Service Tax registrations with different Service Tax Registration Numbers (ST RNs)**, then legally they are treated as **distinct taxable persons** under Service Tax law.
2. **Is service tax applicable on inter-unit services?**
* Since they are distinct taxable persons, any **taxable service provided by one unit to another unit is subject to Service Tax**. * So, yes, **service tax is payable on services provided by one unit to another**.
3. **Why this treatment even if units belong to same company?**
* Service tax law is based on the **taxable person**, not ownership. * Having different registrations means different entities from tax perspective.
4. **Input credit**
* The receiving unit can **avail Input Service Credit** of the service tax paid on services received from the other unit.
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### Exception: Job Work
* If the service provided is a **‘job work’** (i.e., processing or manufacturing service as per notification like Annexure II), then **no service tax** is payable on such service provided by one unit to another.
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### Summary
| Situation | Service Tax Applicability | | ---------------------------------------------------------------------------------- | ------------------------------------------------- | | Two units with different ST registrations, providing taxable service to each other | Service tax is applicable, payer can claim credit | | Service provided is ‘job work’ as per specified notifications | No service tax applicable | | Same unit or branch (single ST registration) | No service tax on internal transfer |
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**So, if your two units have different Service Tax registrations and the service is taxable, service tax will apply.**
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Would you like help in determining whether your inter-unit services are taxable or fall under job work? Or how to do accounting entries for this?
CAclubindia
