How to Verify a Service Tax Number

Last Updated at: December 05, 2019
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Service Tax

If, as a business, you receive a bill that requires you to pay service tax, you may want to verify whether the service tax number it quotes is genuine. There are many cases wherein entities quote incorrect service tax numbers and then pocket the money. In case you find that a particular vendor is doing so, you may even report it to the authorities. It’s easy to perform an assessee verification, provided you know what you’re looking for.

3 Easy Steps for Assessee Verification

1. As a first step, simply visit the website of the Central Board of Excise and Customs.

2. In the bottom right of your screen, you will find an option for an Assessee-Code-based Search.

3. Now simply enter the 15-digit code and clear image verification. You can find both central excise and service tax assessees through this method.

Assessee Verification

You will receive the following information:

a. Name of the Assessee
b. Address of the Assessee
c. Location Code

Register your service tax

How to Understand Service Tax Number Structure

The Service Tax Code Number is a 15-digit code, based largely on the PAN number of the assessee. The first 10 digits are the same as the PAN, while digits 11 and 12 are ST or SD. If you have applied for just one number against a single PAN, then the next three digits will be 001, completing the 15-digit code. Service Tax Code is more important when it comes to applying for a service tax.

Also, get to know how to verify your PAN number & check your PAN card status.

This is also the case for Central Excise number (major account head 38), which is a 15-digit code:
1. Digits 1 to 10 will be the PAN or TAN Number.
2. Digits 11 and 12 will be XM.
3. Digits 13 to 15 will be the number of registrations issued against that PAN or TAN, starting with 001.

In the case of Service Tax Number, it will follow this pattern:
1. Digits 1 to 10 will be the PAN Number.
2. Digits 11 and 12 will be ST or SD.
3. Digits 13 to 15 will be the number of registrations issued against that PAN, starting with 001.

Common Methods of Service Tax Fraud

Three years ago, the Finance Ministry published a report on Service Tax fraud, in which it noted that certain industries are more prone to service tax fraud than others. The main sectors accused of service tax fraud were general insurance, banking and other financial services, work contracts and immovable property leasing are prone to service tax evasion. The major reasons for fraud are as follows:

1. Availing of CENVAT Credit:

The CENVAT Credit scheme allows service providers to set off taxes paid on raw materials or input services against the taxes to be paid on the service provided. Service providers have been found to overstate the amount of tax paid on input services or even include taxes unrelated to the service.

2. Non-registration:

All entities that are liable to pay service tax must register themselves when their revenues hit Rs. 9 lakh. They must start collecting service tax on touching Rs. 10 lakh in revenue. Many service providers (freelancers included) neglect to do so, ending up in the net of the tax authorities.

Know More: Procedure, Process & FAQs on Service Tax Registration

3. Non-payment of Service Tax:

This is the main reason you should verify a service tax number, as service providers may give you an incorrect service tax number and simply pocket the money. Even Kingfisher Airlines stands accused on non-payment of Rs. 76 crore worth of service tax.

4. Undervaluation of Services:

This is non-payment, too, in a way, but more difficult to spot. As the paperwork involved in spotting businesses that are undervaluing their services in order to pay less tax, it is common for businesses to do so and keep the difference paid by their customers for themselves.

For these reasons, an Assessee Verification should be part of the process any business follows while making a payment.

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    A lawyer with 14 years' experience, Vikram has worked with several well-known corporate law firms before joining Vakilsearch.