Small service provider - Exemption

[Praveen Mittal]

Small service providers are exempt from service tax under notification no.33 / 2012 upto a aggregate turnover of Rs. 10L during a financial year. Now my question is in case if the turnover in financial year 2009 - 10 is 12L, financial year 2010 - 11  is Rs.7L, financial year 2011 - 12 is Rs.15L and financial year 2012 - 13 is Rs.5L.  whether once service provided in financial year 2009 - 10 is more than Rs.10L limit then will it be required to charge service tax for all the next years even though the service provided in next years is less than Rs.10L

AI Summary

Exemption for Small Service Providers Depends on Preceding Year's Turnover Under Notification No. 33/2012 A query was raised regarding the exemption from service tax for small service providers under Notification No. 33/2012, which allows exemption for turnover up to Rs. 10 lakh in a financial year. The question concerned whether exceeding this limit in one year affects tax liability in subsequent years. It was clarified that the exemption depends on the turnover of the preceding financial year. For example, if the turnover exceeded Rs. 10 lakh in 2009-10, no exemption applies in 2010-11, but if the turnover was below the threshold in 2010-11, exemption applies in 2011-12. The discussion highlighted the importance of the preceding year's turnover in determining tax liability.