Exempted turnover under ap vat act

Hi freinds

One of my friend running motore vehicles service station,as per Andhra pradesh VAT act he is registered as a retail delear. while conducting the service part he is transfering material and service.In vat return where can he show the service part as an exempted turnover.If he doesn't show the exempted turnover in return what are the consequences.on material part he is directly paid the output vat in vat return also he is showing only material part. his annual turnvoer is more than Rs.10 lakhs but he doesn't have service tax registration.is it necessary to take service tax registration? if Service tax registration is not taken then what are the consequences