Service tax registration
This query is : Resolved
19 April 2013
Good Evening.........
I want to know is Service Tax Registration compulsory who is dealing in Information Technology Software services (Sale & Annual Subscription Service of Tally.ERP Software) for an Individual, If his annual Turnover is less than 8 Lacs.
I want to know is Service Tax Registration compulsory who is dealing in Information Technology Software services (Sale & Annual Subscription Service of Tally.ERP Software) for an Individual, If his annual Turnover is less than 8 Lacs.
19 April 2013
If the turnover is less than 10 lakhs than no need to take registration. However ensure that the person is not liable under reverse charge.
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20 April 2013
Thanks Sir for your suggestion, but I want to clarify about Exemption & Exclusion in Service Tax.
1. Exemption to Small Scale Service Providers:
In exercise of the powers conferred by sub-section (1) of section 93 of the
Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Finance Act),
the Central Government, on being satisfied that it is necessary in the public interest
so to do, hereby exempts taxable services of aggregate value not exceeding Ten
lakh* rupees in any financial year from the whole of the service tax leviable
thereon under section 66 of the said Finance Act:
Provided that nothing contained in this notification shall apply to,-
(i) taxable services provided by a person under a brand name or trade name,
whether registered or not, of another person; or
(ii) such value of taxable services in respect of which service tax shall be paid
by such person and in such manner as specified under sub-section (2) of
section 68 of the said Finance Act read with Service Tax Rules,1994.
So is in this case Service Tax Registration Compulsory for Assesee who is Dealing in IT Services ???
1. Exemption to Small Scale Service Providers:
In exercise of the powers conferred by sub-section (1) of section 93 of the
Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Finance Act),
the Central Government, on being satisfied that it is necessary in the public interest
so to do, hereby exempts taxable services of aggregate value not exceeding Ten
lakh* rupees in any financial year from the whole of the service tax leviable
thereon under section 66 of the said Finance Act:
Provided that nothing contained in this notification shall apply to,-
(i) taxable services provided by a person under a brand name or trade name,
whether registered or not, of another person; or
(ii) such value of taxable services in respect of which service tax shall be paid
by such person and in such manner as specified under sub-section (2) of
section 68 of the said Finance Act read with Service Tax Rules,1994.
So is in this case Service Tax Registration Compulsory for Assesee who is Dealing in IT Services ???
25 July 2025
Great question! Let me clarify the position on **Service Tax registration for IT service providers with turnover below the exemption limit**, based on the **Finance Act and related notifications**.
---
### 1. **Basic Exemption Limit**
* As per the **notification** you mentioned (likely Notification No. 7/2011-ST or earlier), **service providers with aggregate taxable services turnover not exceeding ₹10 lakh in a financial year are exempted from service tax**.
* This means **if your turnover is less than ₹10 lakhs**, **service tax is not payable**.
---
### 2. **Is Service Tax Registration Compulsory Below Exemption Limit?**
* **Generally, NO.**
If your **aggregate taxable turnover (excluding exempted services) is below ₹10 lakh**, you **are not required to register** under Service Tax.
* However, there are **exceptions**:
---
### 3. **Exceptions Where Registration Is Compulsory Despite Low Turnover**
* If you provide services under a **brand name or trade name of another person** (franchise, reseller, brand licensee), you **must register regardless of turnover**.
* If you are liable to pay service tax under **reverse charge mechanism (RCM)**, you must register regardless of turnover.
* If you want to **avail CENVAT Credit** on inputs or input services, you must register even if turnover is below exemption limit.
---
### 4. **Your Case: IT Software Services (Sale & Annual Subscription of Tally.ERP)**
* If you are an **individual selling or providing annual subscription of Tally.ERP** software and your **annual turnover is less than ₹10 lakh**, then:
* You **need not register** for Service Tax.
* You **need not charge Service Tax** to your customers.
* But if you provide these services under the **brand name of Tally Solutions or similar**, then registration is **mandatory irrespective of turnover**.
---
### 5. **Summary Table**
| Condition | Registration Required? |
| --------------------------------------------------------------- | ---------------------- |
| Turnover < ₹10 lakh, no brand name, no reverse charge liability | No |
| Turnover < ₹10 lakh, services under another brand name | Yes |
| Liable to pay service tax under reverse charge mechanism (RCM) | Yes |
| Want to avail CENVAT Credit | Yes |
---
### Final Advice
* Review if you provide services under a **brand name or trade name of someone else**.
* Check if you have **reverse charge obligations**.
* If none of these apply and turnover < ₹10 lakh, you **can skip registration** safely.
---
If you want, I can also help you draft a small note or certificate confirming exemption status for your records or customers. Would you like that?
---
### 1. **Basic Exemption Limit**
* As per the **notification** you mentioned (likely Notification No. 7/2011-ST or earlier), **service providers with aggregate taxable services turnover not exceeding ₹10 lakh in a financial year are exempted from service tax**.
* This means **if your turnover is less than ₹10 lakhs**, **service tax is not payable**.
---
### 2. **Is Service Tax Registration Compulsory Below Exemption Limit?**
* **Generally, NO.**
If your **aggregate taxable turnover (excluding exempted services) is below ₹10 lakh**, you **are not required to register** under Service Tax.
* However, there are **exceptions**:
---
### 3. **Exceptions Where Registration Is Compulsory Despite Low Turnover**
* If you provide services under a **brand name or trade name of another person** (franchise, reseller, brand licensee), you **must register regardless of turnover**.
* If you are liable to pay service tax under **reverse charge mechanism (RCM)**, you must register regardless of turnover.
* If you want to **avail CENVAT Credit** on inputs or input services, you must register even if turnover is below exemption limit.
---
### 4. **Your Case: IT Software Services (Sale & Annual Subscription of Tally.ERP)**
* If you are an **individual selling or providing annual subscription of Tally.ERP** software and your **annual turnover is less than ₹10 lakh**, then:
* You **need not register** for Service Tax.
* You **need not charge Service Tax** to your customers.
* But if you provide these services under the **brand name of Tally Solutions or similar**, then registration is **mandatory irrespective of turnover**.
---
### 5. **Summary Table**
| Condition | Registration Required? |
| --------------------------------------------------------------- | ---------------------- |
| Turnover < ₹10 lakh, no brand name, no reverse charge liability | No |
| Turnover < ₹10 lakh, services under another brand name | Yes |
| Liable to pay service tax under reverse charge mechanism (RCM) | Yes |
| Want to avail CENVAT Credit | Yes |
---
### Final Advice
* Review if you provide services under a **brand name or trade name of someone else**.
* Check if you have **reverse charge obligations**.
* If none of these apply and turnover < ₹10 lakh, you **can skip registration** safely.
---
If you want, I can also help you draft a small note or certificate confirming exemption status for your records or customers. Would you like that?
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