Service tax return st-3
This query is : Resolved
12 November 2013
Dear Sir,
I have filed the ST-3 on 25.10.2013 of my client who is restaurant service provider, they are also providing the service of banquet hall but registration of client is done on single service head (under restaurant service & not in banquet hall service) because banquet hall is ancilliary to restaurant service but we charging 4.944% & 8.652% for restaurant & banquet hall services respectively and the same is timely deposited to government. If banquet hall is not provided for seminars, parties etc., then restaurant will not be able to run efficiently.
The status of ST-3 is showing as rejected due to two rates of services provided in the ST-3 (i.e. 4.944 % 8.652%).
Sir what is remedy for us ? Kindly guide us ??
I have filed the ST-3 on 25.10.2013 of my client who is restaurant service provider, they are also providing the service of banquet hall but registration of client is done on single service head (under restaurant service & not in banquet hall service) because banquet hall is ancilliary to restaurant service but we charging 4.944% & 8.652% for restaurant & banquet hall services respectively and the same is timely deposited to government. If banquet hall is not provided for seminars, parties etc., then restaurant will not be able to run efficiently.
The status of ST-3 is showing as rejected due to two rates of services provided in the ST-3 (i.e. 4.944 % 8.652%).
Sir what is remedy for us ? Kindly guide us ??
12 November 2013
have you classified both the services in return separately?
12 November 2013
No, dont classified the services separately because registration is done on single service only.
12 November 2013
what is the reason aces website is showing for rejection ??
13 November 2013
The reason of rejection being two rates provided in the ST-3 while registration is done under single head of services.
25 July 2025
Got it! The core issue here is:
* Your client is registered **only under “Restaurant Service”** (single service head).
* But you are charging and reporting **two different service tax rates**:
* 4.944% for restaurant service (this includes abatement, so effective rate is lower)
* 8.652% for banquet hall service.
* The ST-3 return is **rejecting because the registration covers only one service head**, but you’re trying to report two different rates under it.
---
### Why this happens?
The service tax system (ACES portal) expects the service provider to report service tax based only on the service heads they are registered for. If the registration is only for “Restaurant Service,” the return cannot accept another service with a different rate (banquet hall).
---
### What’s the remedy?
1. **Option 1: Register separately for Banquet Hall Service**
* Apply for service tax registration under **“Banquet Hall Service”** also as a separate taxable service.
* Once registration is updated, file separate details in ST-3 for both services with their respective tax rates.
* This will prevent the rejection on account of multiple tax rates.
2. **Option 2: Treat Banquet Hall Service as Ancillary to Restaurant Service (single rate)**
* If you want to avoid multiple registrations, treat the banquet hall as a **part of the restaurant service** and charge service tax at the rate applicable for restaurant service (4.944%).
* Do **not** report banquet hall as a separate taxable service in ST-3.
* This means you must charge and deposit service tax at the same rate on banquet hall services.
* This is generally accepted if banquet hall is ancillary and inseparable from restaurant business.
---
### Additional Tips
* Since your client charges **two different rates**, the best practice is to **get a separate registration for banquet hall service**. This aligns with compliance and avoids confusion.
* Until then, only report the **registered service head** in ST-3 with the tax collected accordingly.
* Check your invoice tax breakup and ensure it matches what you report.
---
If you want, I can help draft an application for registration amendment or a sample ST-3 entry under a single service. Just let me know!
* Your client is registered **only under “Restaurant Service”** (single service head).
* But you are charging and reporting **two different service tax rates**:
* 4.944% for restaurant service (this includes abatement, so effective rate is lower)
* 8.652% for banquet hall service.
* The ST-3 return is **rejecting because the registration covers only one service head**, but you’re trying to report two different rates under it.
---
### Why this happens?
The service tax system (ACES portal) expects the service provider to report service tax based only on the service heads they are registered for. If the registration is only for “Restaurant Service,” the return cannot accept another service with a different rate (banquet hall).
---
### What’s the remedy?
1. **Option 1: Register separately for Banquet Hall Service**
* Apply for service tax registration under **“Banquet Hall Service”** also as a separate taxable service.
* Once registration is updated, file separate details in ST-3 for both services with their respective tax rates.
* This will prevent the rejection on account of multiple tax rates.
2. **Option 2: Treat Banquet Hall Service as Ancillary to Restaurant Service (single rate)**
* If you want to avoid multiple registrations, treat the banquet hall as a **part of the restaurant service** and charge service tax at the rate applicable for restaurant service (4.944%).
* Do **not** report banquet hall as a separate taxable service in ST-3.
* This means you must charge and deposit service tax at the same rate on banquet hall services.
* This is generally accepted if banquet hall is ancillary and inseparable from restaurant business.
---
### Additional Tips
* Since your client charges **two different rates**, the best practice is to **get a separate registration for banquet hall service**. This aligns with compliance and avoids confusion.
* Until then, only report the **registered service head** in ST-3 with the tax collected accordingly.
* Check your invoice tax breakup and ensure it matches what you report.
---
If you want, I can help draft an application for registration amendment or a sample ST-3 entry under a single service. Just let me know!
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