TaxTMI 
TaxTMI 
TaxTMI 
The Central Government introduced the concept of small scale exemption from service tax vide Notification No.6/2005-ST, dated 01.03.2005 which was subsequently amended vide Notification No. 4/2007-ST, dated 01.03.2007 and Notification No. 8/2008-ST, dated 01.03.2008. The Central Government on being satisfied that it was necessary in the public interest so to do, exempted taxable services of aggregate value not exceeding four lakh rupees in any financial year from the whole of the service tax leviable thereon under Sec. 66 of the Finance Act, 1994 in exercise of the powers conferred by Sec. 93(1) of the Finance Act, 1994. The said limit was increased to eight lakh rupees vide Notification No.4/2007-ST, dated 01.03.2007 and to ten lakh rupees vide Notification No. 8/2008-ST, dated 01.03.2008.
The above exemption is granted subject to the following conditions:
The term 'aggregate value' has not been defined in the Finance Act, 1994 or in Service Tax Rules, 1994. The Service Tax (Registration of Special Category of Persons) Rules, 2005 defines the term 'aggregate value' as the sum total of first consecutive payments received during a financial year towards the gross amount, as prescribed under Sec. 67 of the Act, charged by the service provider towards taxable services but does not include the payments received towards such gross amount which are exempt from the whole of service tax leviable thereon under Sec. 66 of the Act under any Notification other than Notification No.6/2005-ST, dated 1.3.2005.
The explanation given in this Notification provides that the aggregate value not exceeding ten lakh rupees means the sum total of first consecutive payments received during a financial year towards the gross amount, as prescribed under Sec. 67 of the said Finance Act, charged by the service provider towards taxable services till the aggregate amount of such payments is equal to ten lakh rupees but does not include payments received towards such gross amount which are exempt from the whole of service tax leviable thereon under Sec. 66 of the said Finance Act under any other notification.
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 Sec. 67 for which the person liable for paying service tax is as specified under Sec. 68(2) of the said Finance Act read with Service Tax Rules, 1994, shall not be taken into account.
The exemption granted in this notification is not applicable to the taxable services provided by a person under a brand name or trade name, whether registered or not, of another person or such value of taxable services in respect of which service tax shall be paid such person and in such manner specified under Sec. 68(2) of the said Finance Act, read with Service Tax Rules, 1994.
The term 'brand name' or 'trade name' means a brand name or trade name, whether registered or not, that is to say, a name of 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.
The Service Tax (Registration of Special Category of Persons) Rules, 2005 requires that any provider of taxable service whose aggregate value of taxable service in a financial year exceeds nine lakh rupees shall make an application to the jurisdictional Superintendent of Central Excise in such form as may be specified, by notification, by the Board, for registration within a period of thirty days of exceeding the aggregate value of taxable service of nine lakh rupees.