Procedure for Surrender and Cancellation of Service Tax Registration

1. Attention of
the trade is invited to the provisions of sub-rules (7) and (8) of the Rule 4
of the Service Tax Rules, 1994, which provide for surrender of
 registration certificate in the case of an assessee who ceases to provide
the taxable services for which he is registered. The Superintendent of Central
Excise after ensuring that the assessee has paid all the Service Tax dues may
cancel such registration.
2. Taking note
of the fact that large number of assesses are inactive and number of
applications are pending for surrender/cancellation of service tax
registration, following guidelines are issued detailing the procedure to be
followed in t is regard 
3. An
application for surrender/cancellation of the service tax registration is to be
made for following reasons:- 
a)
 Assessee’s turnover is below the threshold limit. 
b) Change in
the constitution of assessee, say from partnership to company or
amalgamations, 
c)
 Death of proprietor. 
d) Assessee
closing down the taxable service business. 
e) Assessee
has taken centralized registration and hence wants to surrender his other
previous multiple registrations pertaining to various branches. 
f)
 Assessee has shifted its office from the jurisdiction of one
 Division/Commissionerate to another and instead of requesting for change
in the location code and premises code of the assessee, a fresh registration
has been taken for the new address. Therefore, a need arises for surrender of the
old registration. 
g) Due to
technical error in the system, the assessee has been issued multiple
registrations for the same address. In that case, the additional registrations
are required to be surrendered. 
4. Assessees
who wish to surrender their registration certificates shall file their
application on-line using the ACES module on www.aces,gov.in. On successful
filing of the online application, the assessee shall submit the copies of
documents mentioned at para 5 along with signed copy of the printout of the
application generated by the ACES System to the jurisdictional Group
Superintendent or Superintendent(s) of the Registration Cell’ in the concerned
Divisional office. For, surrendering application, submitted by an assessee who
had obtained registration 01.04.2010 and not migrated to ACES, requirement of
online filing of has been done away with and for this purpose the procedure
given in para 8.1 below may be referred to. 
5.  All
the assessees falling under category (a) to (g) of Para 3 are required to
submit following documents: 
(i)
Application Form & Undertaking to surrender the Service Tax
Registration 
(ii) Copies
of last six ST-3 returns filed with the department from the date of taking
registration till the date of surrender but up to a maximum of last six
returns 
Where the
assessee has not filed ST-3 returns for the period mentioned above, on account
of the reasons that the turnover is within the threshold limit of small service
providers exemption then it is not necessary for him to file fresh return for
surrender purpose only. He can apply for waiver of penalty under Rule 7C of STR
for non-filing of returns. Instructions have been issued for waiver of penalty
for non filing of return where total turnover was less than threshold limit.
The fact of non-filing of return should be clearly mentioned in the
undertaking. 
(iii) Copies
of Profit & Loss account and Balance Sheet from the date of taking
registration to the date of surrender, but for a maximum of last 3 financial
years only. However, if Balance Sheet or Profit & Loss Statement has not
been prepared, the applicant may submit copies of Income Tax Return for the
said period. If said return has also not been filed then applicant should
provide appropriate evidence like Bank Statement so as to enable the department
to verify the reason stated for surrender. [Not required for category (e) & (g)] 
(iv) Details
of Show Cause Notice pending adjudication, details of confirmed demands,
details of court cases, details of audit conducted, etc. as per
Annexure-II. 
5.2 In case
of an assessee falling under category (c) of para 3 above, the death certificate
of the proprietor needs to be enclosed along with the application form. 
5.3 In case
of change of constitution [category (b) of para 3] the necessary documents like
Partnership deed or Articles of Association etc. showing change of constitution
may be enclosed along with application for surrender. In case of merger or
acquisition necessary documents such as Order passed by the Hon’ble High Court
or Article of Association to that effect, may be enclosed alongwith the
application of surrender, 
5.4 In case
of assessee taking centralized registration [category (e) of para 3], the copy
of centralized registration certificate, showing the premises for which
surrender application is being submitted, should also be enclosed along with
the application for surrender. 
5.5 For the
cases covered by category (g) of Para 3 above, copy of registration certificate
for which the applicant wants to continue with should also be submitted ‘with
the application for surrender. 
6. After
submission of the required documents as per above details the Superintendent
concerned may require further information like reconciliation of the income
shown in the Profit & Loss Account with the taxable income declared in ST-3
return However, reconciliation information would not be necessary in case of
taking centralized registration or in case of shifting of office from one
jurisdiction to other jurisdiction or in case of technical error resulting in
multiple registration or in case of turnover as per income statement/Profit
& Loss account being below the exemption limit. 
7. The
assessee should submit the required documents with proper indexing of
enclosures. As far as possible all these documents will be verified by the
Superintendent or Inspector at the time of its submission itself. In case of
any deficiency , the same shall be informed to the assessee at the time of
receipt of the documents. It may be noted that if the assessee fails to submit
the complete set of hard copies within 15 days of submission of online
application, it is liable to be rejected. 
8.1 In case
the applicant has taken Service Tax registration prior to 01.04.2010 and has
not migrated to ACES system, it is not necessary for such assesses to migrate
to ACES for surrendering their registration. They can apply for surrender of
registration by a manual application, alongwith other documents as required,
without filing the online surrender application. Instruction have been issued
to liberally cancel the registration for assessee who had taken registration in
the past when there was no threshold limit. Further, in those cases the
intimation regarding the cancellation shall be sent by post. 
8.2 The
assessees who have misplaced the User-id & Password for transacting in ACES
may approach the ‘Help Desk’ of the respective Division along with filled in
application Form (format enclosed as Annexure-III) for generating T-pin. Using
the T-pin generated by the System, which will be received by the applicant
through e-mail. 
9. The
Superintendent shall process the application for surrender of registration and
after successful cancellation of the registration, will inform the assessee
through e-mail, and then the assessees can make surrendering application
through ACES. 
10. In case
of any difficulty, Assistant Commissioner/Deputy Commissioner of the concerned
Division may be approached for the resolution of grievance. 

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