Service tax exemption

[Bijay Shrestha]

A company incorporated in FY 2014-15 and is providing service in FY 2014-15 for ₹ 9,50,000/-. Here the Company has not collected service tax from customers. Now in FY 2014-15, the Company has to register for Service tax and can claim exemption upto ₹ 10 Lakhs.

In FY 2015-16, The Company has provided services for ₹ 15 Lakhs. also not collected any Service Tax. Now the Company can claim exemption upto ₹ 10 Lakhs and pay service tax on ₹ 5 Lakhs. here the company has not collected any service tax.

So my query is whether the Company has to collect Service tax from customers of ₹ 5 Lakhs and pay to the Govt. or if the Customers do not agree to pay ST , then the Company has to pay from own pocket or ₹ 5 lakhs is considered to be inclusive of Service tax and make back calculation and pay service tax i.e ₹ 5 lakhs * 14.5/114.5 i.e. ₹ 63,319/- Service tax???

Please share your views friends.

AI Summary

Company Must Register for Service Tax Once Exceeding 9 Lakhs; Pay Tax on 5 Lakhs Using Back Calculations A discussion on a forum addresses a company's obligation to register and pay service tax. In FY 2014-15, the company provided services worth 9.5 lakhs without collecting service tax, staying under the 10 lakh exemption limit. In FY 2015-16, services reached 15 lakhs, requiring tax on 5 lakhs. Participants debate whether the company should collect service tax from customers or pay from its revenue using an inclusive method. The consensus suggests registration is necessary when services exceed 9 lakhs and, if tax cannot be collected, using back calculations to determine the tax amount.