The Hindu Business Line : Separate exemption for each service?

We are a private limited company providing computer training services. We are registered under the service tax rules and comply with all the applicable rules, such as collection/remitting of tax, filing returns, etc.

Our service tax registration is specific to computer training services. If we provide other services, such as software development, are we eligible for the Rs 4 lakh threshold exemption separately for that service? If not, do we have to take another registration for that service? Such services are likely to be incidental and the quantum involved unlikely to exceed the threshold.

Pritam, e-mail

The value limit of Rs 4 lakh in a financial year prescribed for providing exemption to service providers who provide services on a small scale is not to be calculated with regard to each service separately that may be provided by the service provider.

If a person provides more than one service, then the aggregate value of all such services will be taken together and the exemption limit of Rs 4 lakh will be calculated on that basis. As per Notification 6/2005 (Service Tax) dated March 1, 2005, when a taxable service provider provides one or more taxable services from one or more premises, the exemption under that notification applies to the aggregate value of all such taxable services and from all such premises and not separately for each premise or each service. Thus, in your case, you cannot claim separate exemption for any other service by taking their value separately.

With regard to separate registration for each service, as per Rule 4(4) of Service Tax Rules 1994, the service provider has to make only a single application for registration mentioning all the taxable services provided by him. The Central Board of Excise & Customs in its Circular No 51/13/02-ST dated January 7, 2003, has clarified that where a service provider provides more than one taxable service, it is sufficient that he takes only one registration.

However, the registration certificate should be endorsed for all taxable services and the tax liability is to be discharged for each taxable service separately. The same views have been reiterated in the subsequent Circular No. 72/2/2004-ST dated January 2, 2004. In the light of these provisions, there will not be any need for taking another registration by you under service tax provisions.

Send in your queries to MentorAtYourService@gmail.com

http://MentorQA.blogspot.com

S. Murugappan

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