One of my new client doing taxable services. it is a newly started proprietorship concern. he is sure that his turnover will not exceed 10 lac in first year. but one pvt bank staff registered Service tax for his company to open a bank current account. my client is not aware on that. my query is 1. once registered should he collect s.Tax from his first invoice. 2. he is not comes under mandatory registration, but he registered. is it offence? 3. if he should not collect S.Tax.Should he has to file nil return?
07 September 2013
Under the Finance Act 1994 (Referred as Service Tax Law) a person having lower gross receipt can avail SSI Benefit. (For current period notified under notification no. 33/2012)
Registration for Service Tax is required if person is liable to pay service tax under reverse charged mechanism or having SSI Exemption he has or about to receive receipt exceed 9 lac or He has collect any amount from any person as Service Tax.
If person got registration he can avail SSI Exemption (if he is otherwise eligible e.g. P. Y. turnover, brand name etc.) and opt for not to collect any amount as service tax up to first consecutive gross taxable receipt of Rs. 10 Lac.
If any amount has been collected as service tax before or during such first consecutive taxable gross receipt than it is deemed that the person has opt for not to avail SSI Exemption from and onwards such first receipt for that Financial Year and he is required to collect Service Tax and pay it to the government.
Registration is required for making ST Payment to Government, Filing Returns etc. If Registration is availed but the person has not liable to pay tax then He is not fall within the category of assesse. Registration if not intent fully wrong then is not an offence.
NIL returns means you conveying the message to the department that you have not collect and paid service tax for any reason. It is preferred to avoid consequence of the cause of not filing the return.
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