Small scale service tax exemption must exclude exempt rent-a-cab consideration from aggregate turnover calculation.

For computing the aggregate value under the small scale service tax exemption, consideration attributable to services already exempt from service tax must be excluded from the turnover threshold. Applying Explanation B to Notification No. 6/2005-ST, the exempt 60% portion of rent-a-cab consideration was not required to be included in the aggregate value. After excluding that abated portion, the assessee's turnover remained within the prescribed limit, so the small scale exemption was available.

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Issues: Whether, for claiming small scale service tax exemption under Notification No. 6/2005-ST, the aggregate value of taxable services has to be computed on the full consideration received or after excluding 60% abatement available in respect of rent-a-cab services.

Analysis: The exemption notification was read with its Explanation B, which permits exclusion of consideration received towards services exempt from the whole of service tax leviable thereon. Since 60% of the consideration was exempt under the relevant service tax notifications, that exempt portion was not required to be included for computing the aggregate value. Once the exempt 60% was excluded, the turnover remained within the permissible limit for the small scale exemption.

Conclusion: The aggregate value was required to be computed after excluding the 60% abated portion, and the assessee was entitled to the benefit of Notification No. 6/2005-ST.

Ratio Decidendi: For computing the aggregate value under a small scale exemption notification, consideration attributable to services already exempt from service tax must be excluded and cannot be included in the taxable turnover threshold.

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