SSI Exemption under Service Tax N/N 33/2012

[Chandan Garg]

Can a service provider (Pvt Ltd Co.) claim ssi exemption of Rs Ten Lakhs in respect of services provided by it when it is already paying service tax under RCM on GTA?

[Rajagopalan Ranganathan]

Sir,

SSI exemption is not available for those service tax payers who pay service tax under RCM. In respect of other service provided which are qualified as 'output services' you are eligible to avail SSI exemption up to 10 lakhs provided (i) value of provision of output services during preceding financial year did not exceed ₹ 10 lakhs limit or (ii) is not likely to exceed ₹ 10 lakhs limit during current financial year. For availing the SSI exemption on the basis of criteria (ii) you have to file a declaration with our Range Officer.

[Chandan Garg]

Thanks for reply your sir. Actually we are a trading concern which pays service tax under RCM for GTA service on goods brought into our godown. Recently we have entered into a consignment contract with a manufacturer who would be paying us certain amount of commission on his goods sold by us. My detailed query is as follows:

1. Whether we are providing a taxable service?

2. What is the nature of our service? (According to me it is Business Auxiliary)

3. Can we take the benefit of ssi exemption?

4. If are eligible to take the benefit of SSI exemption:

(a) whether we need to amend our registration to add the service?

(b) whether we are required to mention the amount of commission accrued to us in our Service Tax return and take benefit of SSI Exemption by quoting the N/N 33/2012 in our return?

5. If we are not eligible for SSI exemption, whether we can take the credit of tax paid under RCM and set it off against service tax charged from manufacturer? (according to me, we can not take credit because GTA services is not input service for us as it is not used for providing output service)

[PAWAN KUMAR]

Dear Sir,

As per my view, It is business auxiliary service as you are receiving commission amount.

Benefits under SSI Exemption can be availed and for the purpose you need to amend your service tax registration by adding the such service.

The amount on which you are claiming exemption shall be shown in service tax return to be filed for the period April 2015 to Sept2015.

AI Summary

Company Ineligible for SSI Exemption on RCM Services; Can Claim for Other Services if Criteria Met A private limited company inquires about claiming the Small Scale Industries (SSI) exemption of 10 lakhs for services provided while already paying service tax under the Reverse Charge Mechanism (RCM) for Goods Transport Agency (GTA) services. It is clarified that SSI exemption is not available for services under RCM, but can be claimed for other output services if previous or current financial year service value does not exceed 10 lakhs, with a declaration required. The company, involved in trading and receiving commission under a consignment contract, seeks advice on service classification, registration amendment, and tax return requirements. It is advised that the service is business auxiliary, and SSI benefits can be availed with necessary registration amendments and return disclosures.