Threshold exemption

[mohan k]

I have crossed receipt of ₹ 13 Lakhs in the yeatr 2001-2012. I have paid service tax for the above receipt of ₹ 3Lakh/-(Rs.10Lakhs exemption). In Receipt of ₹ 10Lakh I have received and paid Service tax for the sum of ₹ 4Lakh. Now Whether i have to pay service tax for the balance of ₹ 6Lakh for the above year.

[DR.MARIAPPAN GOVINDARAJAN]

Your query is not clear. The threshold exemption for levying service tax is ₹ 10 lakhs. If the turnover exceeds ₹ 10 lakhs in a financial year service tax is laible to be levied.

[Mahir S]

Sir,

In the first year for one time, you can get threshold exemption upto ₹ 10 Lacs and then u need to get registration and pay service tax on amount exceeding ₹ 10 Lacs. However, if the above ₹ 13 lacs pertains to next/subsequent year, then you have to pay service tax on the whole amount i.e. on Rs. 13 lacs.

[PAWAN KUMAR]

Dear Sir,

The reply of Sh.Naveed Ji is right. If your turnover exceeds ₹ 10 Lakh during previous Financial year, You have to take registration during the succeeding year and start paying service tax on all your transactions.

AI Summary

Threshold exemption: registration required and service tax payable on turnover exceeding the exemption in the relevant year.
Service tax threshold exemption is a de minimis turnover limit that triggers registration and tax liability when exceeded. If turnover in a financial year surpasses the exemption, the provider must register and pay service tax on the amount exceeding the exemption in that year. Where excess turnover is attributable to a previous financial year, registration and tax obligations may arise in the succeeding year; therefore the applicable accounting year determines the timing of registration and the taxable base.