Service Tax act/Rules has provided exemption to small scale service provider from service tax up to aggregate value of taxable services provided of 10 lakh in a Financial Year . This exemption was available before 01.07.2012 and continued even after 01.07.2012 in negative list regime with few changes wef 01.04.2012.
If in the previous financial year the aggregate value of taxable services provided by you was less than Rs.10 lakh and in the present financial year the aggregate value of taxable services provided by you is also less than Rs.10 lakh. Then no need to pay service tax .
If in the previous financial year aggregate value of taxable services provided was less than 10 lakh but this year aggregate value of taxable services provided is more than 10 lakh them you start paying service tax after crossing the threshold of Rs 10 lakh.
If in the previous financial year aggregate value of taxable services provided was more than 10 lakh but this year aggregate value of taxable services provided is less than 10 lakh them you start paying service tax from rupee one.
See chart
If in the previous financial year the aggregate value of taxable services provided by you was less than Rs.10 lakh and in the present financial year the aggregate value of taxable services provided by you is also less than Rs.10 lakh. Then no need to pay service tax .
If in the previous financial year aggregate value of taxable services provided was less than 10 lakh but this year aggregate value of taxable services provided is more than 10 lakh them you start paying service tax after crossing the threshold of Rs 10 lakh.
If in the previous financial year aggregate value of taxable services provided was more than 10 lakh but this year aggregate value of taxable services provided is less than 10 lakh them you start paying service tax from rupee one.
See chart
Aggregate value of
Taxable Services provided
|
Service Tax applicable
|
|
Preceding Financial Year
|
Current Financial year
|
|
Less than 10 lakh
|
Less than 10 lakh
|
No service tax
|
Less than 10 lakh
|
More than 10 lakh
|
Service tax applicable
after 10 lakh
|
More than 10 lakh
|
Less than 10 lakh
|
service tax applicable
from Rs one ,No exemption available
|
The Finance Act 2012, has amended the provision relating to small scale exemption recognizing that the aggregate value up to Rs 10 Lakhs will be in terms of invoices issued/to be issued for taxable services and not payments received.(Notification no.33/2012-ST dated 20.6.2012). This is w .e .f 1.7.2012.
1.Meaning of aggregate value :The small service provider exemption of ` 10 Lakh is available towards “aggregate value not exceeding ` 10 Lakhs”, means the sum total of value of taxable services charged in the first consecutive invoices issued during a financial year but does not include value charged in invoices issued towards such services which are exempt from whole of service tax leviable thereon under section 66B of the said Finance Act under any other notification.
The definition of the ‘aggregate value’ has been amended w.e.f. 01.04.2012 whereby the sum total of the value of taxable services charged in the first consecutive invoices issued/required to be issued during the financial year shall be considered instead of payments received.
The exemption as to small service provider is provided for the keeping the small service provider outside the tax net.
2. Single Limit for all services By same person : where a taxable service provider provides one or more taxable services , the exemption under this notification shall apply to the aggregate value of all such taxable services and not separately for each services;
Suppose A person is providing service XXX and YYY . To avail this exemption aggregate service provided for service XXX and YYY should be less than 10 Lakh
the aggregate value of taxable services rendered by a provider of taxable service from one or more premises, does not exceed ten lakh rupees in the preceding financial year.
3. Single Limit for all offices /Location : where a taxable service provider provides taxable services from one or more premises, the exemption under this notification shall apply to the aggregate value of all such taxable services and from all such premises and not separately for each premises;
Example:In service Tax person can get separate registration for deferential location .To calculate 10 lakh Limit ,Aggregate value of taxable services at all location ,even having different registration number , is to be considered.
In brief this exemption is available person wise not location or service wise.
4.Cenvat Credit not available if Exemption of 10 lakh has been availed.
5. Exemption is optional not mandatory : This exemption is optional so that even such small service providers can opt to pay tax instead of availing the benefit of exemption. In case of such opting to pay service tax, the service provider would get the benefit of CENVAT Credit of duties and taxes paid on capital goods, inputs and input services. By this mechanism the CENVAT credit can get passed on whereby the basic cost of output service would get reduced if the service receiver can avail CENVAT credit.
6.Once exercised Can not be reversed : The option as to non-availment of such small scale exemption and opting to pay tax once exercised, cannot be withdrawn during the remaining part of such financial year.
Option is granted to service provider to avail benefit of threshold exemption to the tune of ` 10/- lakhs. In case option is exercised by service provider, service tax would be applicable only if the aggregate value of taxable service ( provided during the previous financial year exceed ` 10 Lakhs )
7.No exemption where service tax is payable under Reverse Charge: However the above exemption shall not be available to the person made liable to pay service tax under sec (68)(2) [Reverse Charge and Joint Charge liabilities]
The liability of the service provider and service recipient are different and independent of each other. Thus in case the service provider is availing exemption owing to turnover being less than Rs 10 lakhs, he shall not be obliged to pay any tax. However, the service recipient shall have to pay service tax which he is obliged to pay under the partial reverse charge mechanism.
The liability of the service provider and service recipient are different and independent of each other. Thus in case the service provider is availing exemption owing to turnover being less than Rs 10 lakhs, he shall not be obliged to pay any tax. However, the service recipient shall have to pay service tax which he is obliged to pay under the partial reverse charge mechanism.
8. No Exemption If Service are provided under brand name or trade name of others :The person providing service under the brand name or trade name of others. Some persons are providing the services under name of brand name owner. These service providers would not be eligible to the exemption which is available to the small service providers.
If service provided under own brand name or trade name then eligible : If a person is providing a service under his own brand name, he would be entitled to the exemption.
9. The Basic Exemption subject to above condition is available to all type of Person :The basic exemption is not restricted only to individual or partnership firm but it is available to all assessees.
‘Person’ is not restricted to natural person. ‘Person’ has been defined Section 65 B of the Act. The following shall be considered as persons for the purposes of the Act:
Please note that there are different views on this subject ,please read comments given by Manoj aggarwal in comment section also.
Various services has been exempted from service tax vide notification 25/2012 .If service provider is providing both exempted and taxable services than turnover of exempted services is not be added for calculation of 10 lakh .
Similarly abatement from gross amount charged by service provider has been defined in notification 26/2012 .To calculate 10 lakh part only taxable part after abatement is to be considered.
Example: Person is providing services of renting motor vehicle designed to carry passengers. In a given financial year he has charged gross Rs 20 lakh for services . In notification 26/2012 only 40% part i.e 8 Lakh is taxable for renting of motor vehicle designed to carry passengers (40% of 20 Lakh) . So he can can avail 10 lakh exemption available to small service provider ,as taxable part of services provided by him is less than 10 lakh Limit.
Please note that there are different views on this subject ,please read comments given by Manoj aggarwal in comment section also.
Relevant notification is given here under
9. The Basic Exemption subject to above condition is available to all type of Person :The basic exemption is not restricted only to individual or partnership firm but it is available to all assessees.
‘Person’ is not restricted to natural person. ‘Person’ has been defined Section 65 B of the Act. The following shall be considered as persons for the purposes of the Act:
- an individual
- a Hindu undivided family
- a company
- a society
- a limited liability partnership
- a firm
- an association or body of individuals, whether incorporated or not
- Government
- a local authority, or
- every artificial juridical person, not falling within any of the preceding sub-clauses.
Please note that there are different views on this subject ,please read comments given by Manoj aggarwal in comment section also.
Various services has been exempted from service tax vide notification 25/2012 .If service provider is providing both exempted and taxable services than turnover of exempted services is not be added for calculation of 10 lakh .
Similarly abatement from gross amount charged by service provider has been defined in notification 26/2012 .To calculate 10 lakh part only taxable part after abatement is to be considered.
Example: Person is providing services of renting motor vehicle designed to carry passengers. In a given financial year he has charged gross Rs 20 lakh for services . In notification 26/2012 only 40% part i.e 8 Lakh is taxable for renting of motor vehicle designed to carry passengers (40% of 20 Lakh) . So he can can avail 10 lakh exemption available to small service provider ,as taxable part of services provided by him is less than 10 lakh Limit.
Please note that there are different views on this subject ,please read comments given by Manoj aggarwal in comment section also.
Relevant notification is given here under
Notification No. 33/2012 - Service Tax New Delhi, the 20th June, 2012
G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Finance Act), and in supersession of the Government of India in the Ministry of Finance (Department of Revenue) notification No. 6/2005-Service Tax, dated the 1st March, 2005, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide G.S.R. number 140(E), dated the 1st March, 2005, except as respects things done or omitted to be done before such supersession, the Central Government, being satisfied that
it is necessary in the public interest so to do, hereby exempts taxable services of aggregate value not exceeding ten lakh rupees in any financial year from the whole of the service tax leviable thereon under section 66B of the said Finance Act:
Provided that nothing contained in this notification shall apply to,-
(i) taxable services provided by a person under a brand name or trade name, whether registered or not, of another person; or
(ii) such value of taxable services in respect of which service tax shall be paid by such person and in such manner as specified under sub-section (2) of section 68 of the said Finance Act read with Service Tax Rules,1994.
2. The exemption contained in this notification shall apply subject to the following conditions, namely:-
(i) the provider of taxable service has the option not to avail the exemption contained in this notification and pay service tax on the taxable services provided by him and such option, once exercised in a financial year, shall not be withdrawn during the remaining part of such financial year;
(ii) the provider of taxable service shall not avail the CENVAT credit of service tax paid on any input services, under rule 3 or rule 13 of the CENVAT Credit Rules, 2004 (herein after referred to as the said rules), used for providing the said taxable service, for which exemption from payment of service tax under this notification is availed of;
(iii)the provider of taxable service shall not avail the CENVAT credit under rule 3 of the said rules, on capital goods received, during the period in which the service provider avails exemption from payment of service tax under this notification;
(iv) the provider of taxable service shall avail the CENVAT credit only on such inputs or input services received, on or after the date on which the service provider starts paying service tax, and used for the provision of taxable services for which service tax is payable;
(v) the provider of taxable service who starts availing exemption under this notification shall be required to pay an amount equivalent to the CENVAT credit taken by him, if any, in respect of such inputs lying in stock or in process on the date on which the provider of taxable service starts availing exemption under this notification;
(vi) the balance of CENVAT credit lying unutilised in the account of the taxable service provider after deducting the amount referred to in sub-paragraph (v), if any, shall not be utilised in terms of provision under sub-rule (4) of rule 3 of the said rules and shall lapse on the day such service provider starts availing the exemption under this notification;
(vii) where a taxable service provider provides one or more taxable services from one or more premises, the exemption under this notification shall apply to the aggregate value of all such taxable services and from all such premises and not separately for each premises or each services; and
(viii) the aggregate value of taxable services rendered by a provider of taxable service from one or more premises, does not exceed ten lakh rupees in the preceding financial year.
3. For the purposes of determining aggregate value not exceeding ten lakh rupees, to avail exemption under this notification, in relation to taxable service provided by a goods transport agency, the payment received towards the gross amount charged by such goods transport agency under section 67 of the said Finance Act for which the person liable for paying service tax is as specified under sub-section (2) of section 68 of the said Finance Act read with Service Tax Rules, 1994, shall not be taken into account.
Explanation.- For the purposes of this notification,-
(A) “brand name” or “trade name” means a brand name or a trade name, whether registered or not, that is to say, a name or a mark, such as symbol, monogram, logo, label, signature, or invented word or writing which is used in relation to such specified services for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified services and some person using such name or mark with or without any indication of the identity of that person;
(B) “aggregate value” means the sum total of value of taxable services charged in the first consecutive invoices issued during a financial year but does not include value charged in invoices issued towards such services which are exempt from whole of service tax leviable thereon under section 66B of the said Finance Act under any other notification.”
4. This notification shall come into force on the 1st day of July, 2012.
[F.No. 334 /01/2012- TRU] (Raj Kumar Digvijay)Under Secretary to the Government of India
Really Good Article.
ReplyDeleteVery good coverage. Thanks. I have a question. Last two lines of Para 8 of the lead article say "If a person is providing a service under his own brand name,he would be entitled to the exemption". I am an Actor in films and TV Serials. I receive payments in my name by crossed a/c payee cheques,and sometimes by cash on a voucher signed by me.The title card of film/TV Serial shows my name. Am I exempted from paying Service Tax?
ReplyDeleteYes, yes . no doubt in that . You are providing services to the producer and there is no question of brand name arises in services provided in individual capacity.
DeleteSo you can definitely claim exemption limit.
Dear sir,
ReplyDeletenow service provider is also covered in sec. 68 (2), than those service provider who are covered in in partial reverse charge also have to pay tax from Rs. 1 ? ( no exemption can availed)
please clear the matter, Thanks in advance.
Under section 68(2) service receiver are liable to pay tax not service provider.
Deleteso If persons are liable to pay tax due to reverse charge ,then they(service receiver) can not claim exemption of Rs 10 Lakh, even service provider has a turnover of less than 10 Lakh .
read point no 7 above.
Under section 68(2) service receiver are liable to pay tax not service provider.
Deleteso If persons are liable to pay tax due to reverse charge ,then they(service receiver) can not claim exemption of Rs 10 Lakh, even service provider has a turnover of less than 10 Lakh .
read point no 7 above.
Some times basic doubts arises. you have clarified this. Thanks a lot.
ReplyDeleteThanks a lot!
ReplyDeleteI have a doubt:
Amount of bill raised for taxable services during the following financial years:
2008-09: Rs. 8,00,000/-
2009-10: Rs. 11,00,000/-
2010-11: Rs. 9,00,000/-
2011-12: Rs. 12,00,000/-
I am sure that exemption is available to F.Y. 2008-09 & 2009-10 but doubt is that "whether exemption is available for F.Y. 2011-12".
In our view person can avail exemption in 2011-12 also .But he has to opt for this scheme . The notification has given an option not to avail the benefit of the above notification.But the Notification is silent on how the option will be exercised. In absence of any specific procedure, it would be desirable to make a declaration by way of an application on plain paper mentioning the intention to avail for the exemption scheme.
DeleteDear Raja Babu,
DeleteThe exemption is available automatically and no need to exercise any option. Yes, if a service provider want's not to avail this exemption, then he has to exercise his option for non-availment, which may be done by a self declaration.
I, in the role of freelancer software developer, receive a payment of more than Rs. 10.0L through Paypal from outside India. Do I need to go for Service Tax registration.
ReplyDeleteS K Agrawal
saroj123@gmail.com
I will be thankful if you spare some time to answer this question.
DeleteS K Agrawal
saroj123@gmail.com
yes.you have to go.
Deletebecause it is taxable service.
As per above Chart in third row Service Tax applicable from Rs one,
ReplyDeleteNo. exemption available that means-
Preceding Financial Year- After Rs. 10 lakh
Current Financial year- From beginning
Status of current year is shown in third column.Yes ,in current year tax will be applicable from beginning if proceeding year turnover is more than 10 lakh.
DeleteTo check the status of preceding financial year service tax applicability you have to go back one more year back.only then you can decided ,from which amount service tax applicable.
hi this is triyambak. i have a doubt in paragraph 6 it is saying that unutilised balance in CENVAT CREDIT after deducting the amount referred to in sub-paragraph (v), if any, shall not be utilised in terms of provision under sub-rule (4) of rule 3 of the said rules and shall lapse on the day such service provider starts availing the exemption under this notification; i do not understand the value of point v in point vi .
ReplyDeleteI recently got sales tax no., while deal in stuff which is liable for service tax. Now I am in a fix, since there is an exemption on service tax, while I have a sales tax no. I have to submit a proposal to a govt. Institution, what shall I do.
ReplyDeleteCan I submit this proposal through some other name. Also, govt. Institutions might ask for a registration no., or is it not necessary, due to exemption policy?
Can I submit this proposal through my TIN No. , this work is a website related stuff.
any reply would be of great help. Thanks
enlightment!!!!! thanks you !!! :)
ReplyDeleteI am completely confused after talking to the Service Tax Superintendent. I started software consulting in Feb this year and earn about 2lakh per month. So from exemptions perspective my understanding is that I will be exempted for Feb and March as it is below 10lakhs. Even in this financial year I will be exempted from ST from April to Aug and start paying from Sep when it crosses 10L. But the officer says that there is no concept of financial year and I will get only one exemption of 10lakh starting from Feb to now. Please throw some light on this.
ReplyDeleteDEAR RAJA BABU,
ReplyDeleteOne person has provided service of commercial construction with materials on the basis of tender for the amount of Rs.5.2 Lac in the financial year 2006-07 in which threshold limit for ssp notification No. 06/2005 was Rs. 4 Lac. Materials of Rs. 3.2 Lac was used in the said services, we apply Notification no. 12/2003 & also issuing CA certificate evidencing the materials used. It means he provided actually service of Rs. 2 Lac.
Query is whether Service provider is eligible for taking benefit of Notification No.06/2005 not required to pay service tax in the year 2006-07 as his service portion does not exceed Rs. 4 Lac? Or he is required to pay service tax on balance amount or Rs 1.2 Lac ( Gross Amount Received Rs.5.2 Less Threshold limit for SSP)?
Service Tax not chargeable in such case.To check SSP limit only service portion is required to be considered not whole value of composite works contract.
Deleteas in given case value of service provided is less than ssp limit ,tax is not applicable.
Dear RAJA BABU,
DeleteAre there any Decisions or any Circular over & above section 67 & Notification 12/2003 for making the case stronger as this being a case of TENDER of composite contract its difficult to give justification to the Department without any decision?
Dear RAJA BABU,
ReplyDeletewith reference to query of PRADEEP MULANI21 December 2012 3:18 PM
Are there any Decisions or any Circular over & above section 67 & Notification 12/2003 for making the case stronger as this being a case of TENDER of composite contract its difficult to give justification to the Department without any decision?
In our view ,it is very much clear that material value can not be added for service tax purpose .so CASe laws are not required .Further pls read master 97/04.01.2008 circular,it clerly says that
DeleteValue for the purposes of levy of service
tax under works contract service does
not include the value pertaining to
transfer of property in goods involved in
the execution of a works contract leviable
to VAT/ sales tax."
Though the context is for cenvat but it is applicable on valuation also.
Hello,
ReplyDeleteA small query on service tax. I believe payment of service tax to the government comes into effect only after 10 Lakh Rs. limit is crossed.
Let's say a small shop owner charges service tax to the customers. But in the financial year, the limit for service tax is not reached i.e. remains below 10 Lakhs (say at 8.5 lakhs).
What should the shop owner do with the amount he has collected in advance as service tax from customers?
Should it still be paid to the tax authorities, or carried forward to next year, or can be utilized by the shop owner?
Thanks
if he has collected the amount then he has to deposit the same to department ,if he wants to claim exemption he should not collect tax from customers also.
DeleteDear Rajababu
ReplyDeleteIf one person having three partnership with Three different person and having three different premises then how we calculate this 10 lakhs turnover limit for three different partnership'
10 lakh exemption is available to all the three partnership firms separately
DeleteWhat if office address for all three partnerships are also same???
DeleteIs Bank Guarantee is must along with the other documents submitting for Freight Tax Exemption in India??
ReplyDeleteSir
ReplyDeleteI am a civil contractor engaged in works contract business. Last year my gross turnover was 11 lakhs.The service tax officials insist that I had crossed my basic exemption limit of 10 lakhs and that I need to pay service tax from Rupee one in the current financial year.
Kindly clarify whether the basic exemption limit of 10 lakhs is for the gross turnover of works contract or only for the service component.
Regards
only service part is to be considered for exemption purpose ,you ask them under what under what rules gross turnover is to be considered
DeleteDear Sir,
ReplyDeleteAt para 10, you have suggested that Abatement and exempted services is not to be counted for calculation of 10 Lakh.
This is correct with respect to exempted services. But in my view, abatement available under not. no. 26/2012 is a part of aggregate value since it is not wholly exempt.
Explanation(B) “aggregate value” means the sum total of value of taxable services charged in the first consecutive invoices issued during a financial year but does not include value charged in invoices issued towards SUCH services which are exempt from WHOLE of service tax leviable thereon under section 66B of the said Finance Act under any other notification.”
In case of abatement, WHOLE service is not exempted.
Sir, Please correct me.
Regards,
Manoj Agarwal (tax2001-it@yahoo.com)
Explanation(B) “aggregate value” means the sum total of value of "taxable services charged"
Deletein above word is taken as taxable service charged but through abatement, value of taxable service is reduced
Explanation(B) “aggregate value” means the sum total of value of "taxable services charged in the first consecutive invoices"
DeleteSo, in an Invoice claiming abatement, the value is charged in full and only tax is reduced, not the value. Value in full with abated tax is paid by the receiver of service to service provider.
Also, Otherwise going by the same analogy, there was no need to specifically mention "but does not include value charged in invoices issued towards SUCH services which are exempt from WHOLE of service tax leviable thereon under section 66B of the said Finance Act under any other notification."
Suppose a builder provided a complex to customers.For which he has charged 11 lakhs from them (including land) and availed abatement under notification 26/2012 for 75 % .Assume that this is his first year of operation and only sale in the year . what should be the service tax he should charge from the consumer.
DeleteSir, as per my understanding, 'aggregate value' does not include value charged in invoices issued towards 'SUCH SERVICES' which are 'EXEMPT' from 'WHOLE OF SERVICE TAX' leviable thereon.
ReplyDeleteIn Abatement notification no. 26/2012, the notified 'SERVICES' are 'PARTIALLY EXEMPT' from tax, instead of 'WHOLLY EXEMPTED' as in notification no. 25/2012.
Having reiterated this, the builder should issue Invoice for Rs. 11 Lacs. 1st 10 Lacs is fully exempted vide Not. No. 33/2012. So, tax is chargeable on balance Rs. 1 Lac and after availing abatement of Rs. 75,000/- tax is charged @12.36% on Rs. 25,000/- which comes to Rs. 3,090/-
In our view if Land value is more than 1 lakh then person should not avail abatement at all and as the balance amount will be less than exemption limit of 10 lakh so Nil Tax is payable after exemption.
DeleteFurther if we go by your views also that abatement is not to be considered for exemption limit then the calculation should be as under.
Gross value charged to customer =1100000
less :abatement 75 % =825000
Balance taxable part =1100000-825000=275000(A)
Gross value charged to customer =1100000
less :exemption =1000000
Balance taxable part =100000(B)
service tax on (A)or (B) which ever is less.
12.36% on 100000=12360 Rs
This is due to the fact that it is not mentioned in abatement that this is to be allowed after exemption limit
Is Example A, the benefit of exemption of 10 Lacs is not availed.
DeleteIn Example B, the benefit of abatement of 75% has not been availed.
Both the notifications 26 & 33 are independent of each other and are beneficial for the assessee.
So, even if it is not mentioned in abatement that this is to be allowed after exemption limit, the exemption limit must be allowed as it is a special benefit given to the small service providers.
In your example, suppose the builder issues 2 invoices, 1st for Rs. 10 Lacs and 2nd for Rs. 1 Lac. Then what will be the service tax according to you?
Sir
ReplyDeleteMy aggregate gross turnover for works contract in the previous year is Rs 12 lakhs. We have Not shown the material portion and the service portion separately in our Bills. Does it mean that we have crossed the threshold exemption limit of 10 lakhs and if so what would be our tax liabilty?
Dear Raja Babu
ReplyDeleteKindly answer the above query please.
Regards
In our view service tax can not be imposed on material part , so you can avail benefit of material part and net amount can be offered for service tax .In your case net amount will be less than 10 lakh so you are eligible to get exemption.
DeleteFurther you may issue addition details as annexure to the bill to the party and save them in your records for future requirement
Dear Raja Babu
DeleteThe gross value of 12 lakhs has been arrived as an aggregate of 15 different Works Contract bills issued during the year.
How can we issue addition details as annexure to each of the bills seperately?
Regards.
what we have to do if output in less then cenvat?
ReplyDeleteC/F Cenvat credit
DeleteHello Sir,
ReplyDeletewhat if the salary and other expenses exceeds the overall turn over.
say for example: i have totally 15 employees salary and other expenses which costs me 12 lakhs and my yearly turn over is 11 lakhs..so i need to pay service tax??
i cant ask my service receivers to pay, as they are foreign clients...
greatly appreciate your reply.
Thanks,
Being a a foreign client, a service recipient, analyse in the light of place of provision of service rules read with Rule 6A of Service tax Rules, if the same qualifies for export. If so, there is no requirement to make payment of Service tax.
DeleteTrust your query is answered.
regards,
CA Jigar
Sir, I have a manpower recruitment consultancy, and its income was below 9lacs, still my CA asked me to pay ST,every quater. It was not at all needed. If income do not exceed 9lac limit,Do I need to pay ST for nxt financial yr(13-14) also?
ReplyDeleteSir
ReplyDeleteMy name is Clement I have been doing small rental real estate transactions over the past few years i have being made to submit bills that include service tax , my annual income totally come to 3 lakhs , 4.5 laksh and this year till date is Rs. 5 lakh ,i have to usually share my earning with my associates after doing so i end us earning around 2 lakhs or less till now , i found this article and really want your help should i pay service tax or am i exempted ,
Waiting to hear your advice .
service tax is not on income but on sale/turnover price. However in your case as turnover is less than 10 lakh ,so you can avail basic exemption of 10 lakh.
DeleteThis exemption is allowed after voluntary registration ?
ReplyDeleteI mean the exemption is allowed even provider is registered under service tax if they are not charging service tax from customers ?
Pls clarify asap.
yes, you can avail exemption even after registration .but you have to file return if you are a registered dealer
Deleteif in the first year of business, service provider crosses the threshold limit of Rs. 10 Lakh, what will be the implication ?
ReplyDeleteWhether service tax has to be paid on entire amount or amount of service in excess of Rs. 10 Lakh.
only on services provided in excess of 10 lakh
DeleteSir, I'm a authorised two wheeler dealer of a branded manufacturer. I've been doing sales and service since 5 years. Assuming I get the basic exemption limit for the small scale service provider, I've not registered under ST. But the department has asked me to pay the tax from 1st invoice.
ReplyDeleteThough I use the brand name of the manufacturer, I've my own registered firm through which we raise the invoice. Could you please clarify what does using brand name exactly mean. I mean will a franchisee using the brand name and I, authorised dealer using the manufacturer's brand name are one and same.
in our view general exemption is available to you .same is shown on govt website
Deletehttp://www.servicetax.gov.in/st-profiles/service-stns-motors.htm
The value of services provided for a client is Rs. 7 lakhs. Additionally, the individual provides services which are liable in the hands of the services recepient (i.e. under reverse charge). The value of these services is approx. Rs. 4 lakhs. Is the service provider required to obtain registration considering that the aggregate value of services provided by the service provider is Rs. 11 Lakhs?
ReplyDeletePlease comment
yes, he is liable to register.As total service provided is more than 10 lakhs
DeleteHello Sir, aggregate value up to Rs 10 Lakhs will be in terms of invoices issued/to be issued for taxable services. But in case of advances received for taxable services to be provided in future, whether basic exemption can be availed or service tax has to be paid from the first rupee received? If it has to be paid from the first rupee received as advance whether basic exemption can be availed later while invoicing which shall be done after service is rendered?
ReplyDeleteRegards.
basic exemption will be available also in this case also. it is covered under services to be provided
DeleteDear Sir,
ReplyDeleteI have started Travel Agency 8 months back. In the beginning only I have done registration of service tax. At the end of this financial year my total turnover (taxable amount) is less than 10 Lack. Am i eligible for exemption from service tax as my turnover is below 10 Lack? Please advise
Sir,
ReplyDeleteIf Service is 1st Time become Taxable
such as ST on ACTOR wef 01st July 2012\
then
my Question is
if an Assessee crossed Rs 10/- Lakhs in P/Y i.e F.y 2011-12
then Basic Exemption Limit will be available for F.Y 2012-13 or not
Dear Sir,
ReplyDeleteif Sale/Turnover are
2010-11: Rs. 9,60,000/-
2011-12: Rs. 9,00,000/-
2012-13: Rs. 9,50,000/-
Is there any need to have Service Tax No. Registration?
if No, then can you please provide Government Rules Link/Chapter number in which the same has mentioned.
hi friend!
Deleteif turnover during the year exceeds Rs.900000 may be called gross receipts or total receipts require to get registered under the act is mandatory.yeah!service tax still not to be paid unless the limit of Rs. 1000000 not crossed during the year.hence above receipts received than RS 1000000 is eligible to pay tax.
Hello Sir,
ReplyDeleteI am planning to start a web designing Company and offer my services online, I mean I won't have any office for now, I will work from home, and may be hire employees online. I want to start as a sole proprietorship.
So I want to know do I need to register my Company before I start off, and if I need to do what will be the procedure.
Any information in this respect will be appreciated.
Thanks in advance.
EVEN we are also operating from home and not have any office after six year of our operations .......however you have to have service tax registration if services provided are more than 9 lakh in a year
DeleteVery helpful. Consider this:-
ReplyDeleteA professional was not liable for ST till 30-Jun-2012, the gross receipts were though above 10lakh.
ST registration was taken after the new negative list, where the profession is liable to ST from 1-july-2012. Now this 10lac exemption will start from 1-july-12 as income before will not be 'taxable service as per section 65B(51)'.
Suppose he is making 2lac per month, as he has been since last one year, he will be liable to ST only after 1-Dec-12 i.e after 10lac starting from 1-july-2012. Please correct me if I am wrong.
yes you are correct for fy 12-13.But person can not avail exemption in fy 13-14 as turnover is more than 10 lakh in fy 2012-13
DeleteMany thanks. Much appreciated.
DeleteI am a Computer Hardware Trader provides services to customer both Branded and Personal Services . Branded Like Microsoft, Tally, Anti Virus etc are not exempted and Personal Services Like Computer Repair Computer Maintenance is exempted total of both is below 10 Lack but as per Rule for branded services i need to register and collect Tax for Branded Services but actually i am exempted as in total i am below 10 Lacks should i file return separately for Both. Is it OK if i dont collect tax on my personal services.
ReplyDeleteyou can file common return .Further as per rule tax is not applicable on non branded services up to 10 lakh
Deletedear sir,
ReplyDeletei am running internet cafe for last year. i have total turnover 350000
per year, i found this article and really want your help should i pay service tax or am i exempted ,
service tax return necessary for me
exempted as turnover is less than 10 lakh
Deletedear sir,
Deletei am running internet cafe for last year. i have total turnover 350000per year, i found this article and really want your help should i pay service tax or am i exempted ,
service tax return necessary for me
thanks sir ans my question but sir about my
service tax return , it is necessary for me
thanks again
if you are registered person then return is mandatory , if not registered then no need to file return ,infact non registered person can not file return at all.
Deletedear sir one question again registration for service tax mandatory total turnover 350000per year
ReplyDeleteNo , registration is required only if turnover is 900000
DeleteWhat if the registered deed is in two names can both enjoy exemption limit in immovable property to 10 lakhs.
ReplyDeleteThank u plz reply me im very confused.
yes , both can avail separate exemption limit
DeleteGood day,
ReplyDeleteRental income in last financial year - Less than 10 lakh
Rental income in this financial year - (expected)-More than 10 lakh (11.5 lakhs)
As per your explaination above- "Service tax applicable after 10 lakh"
Can you explain how much service tax I need to pay in this year?
Thanks
Read more: http://www.simpletaxindia.net/2012/09/service-tax-exemption-limit-who-can.html#ixzz2RvEvZ7OG
If you are registered under both services i.e. (Central Excise and Service Tax). As a service provider our turnover is only 3 lacs. If we consider both the services then our turnover is very high. Can we avail the benefit of Service threshold limit of Rs. 10 lacs.
ReplyDeleteKindly confirm.