As I have earlier clarified that service tax exemption is based on some conditions and most important and basic condition is that
- To avail service tax the current year, value of taxable service provided should not be more than exemption limit.
- exemtion is not available on service provided on Brand name or trade name whether registered or not or of another person.
From your query it is assumed that last year service provided is also around Five Lakh and less than exmption limit.
so point wise answer to your queries are given below
- No ,service tax upto exemption limit i.e 1000000 ,the aggregate of first bills collected ,is not required to be collected,so no need to deposit tax on 480000(amount collected earlier)
- If income From new assignment is 700000 then total sale will be 480000+700000 =1180000,in that case firm should collect service tax on 11.80-10.00=1.80 Lakh only.and not on whole of the amount and more over in next year he has to deposit tax from the starting amount.And if assignment is of 500000 then total of first service receipt collected will be 9.80 Lakh i.e less than exemption limit of 10 lakh hence no tax is required to be deposited
- Exemption limit is calculated on the basis on" Value of taxable service provided" and not including service tax .so amount of exemption is to be calaculated without service tax.