Service Tax Exemption for Turnover beneath Rs 10 Lakhs

Service Tax is required to be paid on all companies besides these specified within the unfavourable listing of companies. Nevertheless, a small scale service supplier has the choice of availing service tax exemption in case the mixture turnover worth of taxable companies doesn’t exceed Rs 10 Lakhs in a monetary yr.

  • Beneficial Learn: What’s Service Tax and Service Tax Charge in India

Subsequently, if the mixture worth of companies doesn’t exceed Rs. 10 Lakhs in a monetary yr, the service supplier can declare advantage of this service tax exemption and he received’t be required to pay any service tax on such companies.

Though Service Tax is required to be paid solely when the mixture worth of companies offered exceeds Rs. 10 Lakhs in a monetary yr, the service tax supplier is required to use for Registration for Service Tax inside 30 days of his turnover exceeding Rs. 9 Lakhs.



Beneficial Learn:

  • All about Service Tax Registration
  • What’s Service Tax Quantity

The service supplier additionally has the choice of not availing this exemption and will pay service tax no matter his whole combination turnover. Nevertheless, as soon as the service supplier begins paying service tax throughout any monetary yr, such possibility shall not be withdrawn through the remaining a part of such monetary yr.

Beneficial Learn:-

  • Process for Fee of Service Tax
  • Due Date for Fee of Service Tax

The idea of Service Tax Exemption was first launched within the yr 2005 vide Notification No. 6/2005 whereby combination companies beneath Rs 4 Lakhs had been exempted from service tax. This restrict was elevated to Rs 8 Lakhs in yr 2007 vide Notification no 4/2007 after which elevated to Rs 10 Lakhs in yr 2008 vide Notification No 8/2008

Situations for availing Service Tax Exemption

Service Tax Exemption shall apply topic to the next situations:-

1. Turnover within the earlier monetary yr

The combination worth of taxable companies rendered by a service supplier shall not exceed Rs. 10 Lakhs through the earlier monetary yr. In different phrases, service tax exemption can solely be claimed if in each the earlier in addition to the present monetary yr, the mixture worth of taxable companies doesn’t exceed Rs. 10 Lakhs.

If in any monetary yr, the mixture worth of companies exceeds Rs. 10 Lakhs, the service supplier wouldn’t be allowed to assert this small scale exemption and can be required to pay Service Tax.



2. CENVAT Credit score

The service supplier shall not avail the CENVAT Credit score of the tax paid on any enter or enter companies used for offering the service for which the exemption has been availed. The service supplier shall additionally not avail the CENVAT credit score on capital items acquired through the interval by which the exemption has been availed

Furthermore, the service tax supplier who begins availing the small scale service tax exemption shall be required to pay an quantity equal to the CENVAT credit score taken by him, if any, in respect of such inputs mendacity in inventory or in course of on the date on which the service tax supplier begins availing the small scale service tax exemption.

The stability of CENVAT credit score mendacity unutilised after deducting the mentioned quantity, if any, shall not be utilised and shall lapse on the day the service supplier begins availing this exemption.

3. Non applicability of Service Tax Exemption

This small scale service tax exemption shall not apply in instances the place Reverse Cost is relevant.

This small scale exemption shall additionally not be relevant the place taxable companies are offered by an individual underneath a model identify or commerce identify, whether or not registered or unregistered of some other particular person.

4. Which means of Mixture Worth of Turnover

Mixture Worth not exceeding Rs. 10 Lakhs means the sum whole of first consecutive funds acquired throughout a monetary yr in the direction of the gross quantity, as prescribed underneath Part 67, however doesn’t embrace funds acquired that are exempt from complete of service tax underneath some other service tax exemption notification.

Furthermore, the place the service tax supplier supplies 1 or extra companies from 1 or extra premises, the exemption shall apply to the mixture worth of all such companies and from all such premises and never individually for every premises or companies

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