Service tax registration – more than for paying tax
The CBEC directed the field formations vide letter dt. 3/09/2007 ] to give service tax registration without asking any questions. CBEC's concern for genuine tax payers is understandable, but what they fail to understand is various purposes for which the service tax registration is put use other than for filling the Govt kitty, like…
++To obtain tender documents and to file tenders- many PSUs, Defence Establishments and private organizations make it mandatory for the tender participants to possess registration with the department.
++To register as vendor of services in some organizations- many organizations ask the service providers approaching for work to obtain service tax registration before enlisting them in their vendor list.
++To open current account with the banks- some banks are advising to obtain service tax registration to open current account.
For a small time service provider, the service tax registration gives his business a stamp of approval from none other than the Central Government.
Perhaps service tax registration is the only registration given without any verification (pre or post facto). Already many non-serviceable registrants have piled up in every Commissionerate and the department is finding it difficult to weed out those small service providers who obtained registrations when there was no threshold exemption. In spite of Rs. 8 Lakhs exemption, persons still approach the department for registration not for payment of tax, but to cater to other purposes. An officer working in the field told DDT that they have no other option except to put some questions, and call for certain documents just to dissuade all such non- service providers from taking registration. Otherwise, the workload multiplies without any additional revenue and the numbers become unmanageable. Also in a department where the statistics play a vital role to measure the performance, the national average per registrant will be adversely effected due to these “ non- revenue” registrants.
Hence, there is an urgent need on the part of CBEC to realize this ground reality and to give wide publicity to educate general public not to go for registration other than for the purpose of payment service tax. As the Finance Minister rightly observed Service Tax advertisements must emphasize on content rather than colour.