Service tax Number, VAT, Company registration - Business & Economy - Entrepreneurship - TIK Share

Service tax Number, VAT, Company registration

Umashankar Das


What is a better option if I have a contract of 15 lakhs with a client?

Setup a company and pay service tax.

Or, take the contract as freelancer with income tax deducted at source?

CA Pulkit Sharma


Lets try to understand your case.

You have a service contract, and have the options to either take it in company form or individual form but subjected to service tax and TDS.

Well, service tax is an indirect tax collected charged by service providers once their receipts cross 10 Lakhs in a year. So, whether you take contract as freelancer or incorporate a company, service tax will be charged on the amount of contract.

Coming to TDS part, again TDS is deducted whenver someone pays more than 30,000 in a year to consultants. So, whether you form a company or not TDS will be deducted.

You cannot avoid TDS, whether you have company or not. Service tax can be avoided upto 10 Lakhs, but after that service tax should be charged regardless of your status (company or freelancing).



Ganesh babu k


Going for a company or working as individual is all left for you,


Depending on your future aspirations on your business and your business growth

If you want funding from bankers and you aspire good growth in your business and want to go with a good name into the business world you better prefer to form a LLP or company.

You may contact us for incorporation of LLP or company


If it is one time offer for you i recommend you to go as individual

For your refernce,

Whether u work as individual or as company it is mandatory to get service tax registration if gross receipts in financial year exceeds 9 lakhs



if it is exceeding in your case you mandatorily requred to take service tax registration and have to charge service tax accordingly