Exemption from Service Tax

[CA AJAY KUMAR AGRAWAL]

Kindly share your views on the following:-

In the year, where value of Taxable Services exceeds ₹ 9 Lacs he is required to get registration & pay Service Tax when Gross Receipts ₹ 10 Lacs. My question is once he so starts paying Service Tax & in future his Gross receipts become much less (may be it remains low for 1 or 2 years or for long period) whether he has to regularly pay Service Tax or he will be again exempted when Gross Receipt is less than ₹ 10 Lacs?

AI Summary

Businesses with turnover below 10 lakhs exempt from service tax but must file Nil returns until deregistration. A discussion among tax professionals addresses whether a business must continue paying service tax if its gross receipts fall below 10 lakhs after initially exceeding this threshold. The consensus is that if the turnover drops below 10 lakhs in a subsequent financial year, the business is exempt from paying service tax, but must file Nil returns until the registration is canceled. However, with the anticipated introduction of GST, these rules may change, and the new threshold limits under GST are expected to be 20 lakhs, with a lower limit for Northeast states.