How to calculate threshold exemption limit of ₹ 10 lakh

[samiuddin ansari]

Sir,

An unregistered service provider engaged in providing taxable services i.e.Business auxiliary service and Restaurant service have been asked by the tax consultant to get themselves registered with Service Tax. I have some confusion on this aspect. In fact, they have a turnover of ₹ 6 lakhs in providing Business auxiliary service and ₹ 7 lakhs as income from Restaurant service in the last F.Y-2015-16. For calculating the threshold exemption limit as provided under Notification No.33/2012-S.T whether a total amount of ₹ 15 lakhs is to be taken into consideration for total taxable value or ₹ 08.80 lakhs i.e. ₹ 6 lakhs plus ₹ 2.8 lakhs (40% of Restaurant service income after allowing abatement of 60%).

Thanks with regard.

[KASTURI SETHI]

Total turnover of of both (without abatement) is to be considered for computing threshold exemption limit of ₹ 10 lakhs. It is natural that an assessee is eligible for abatement only after he is registered with Service Tax department. It is not possible to avail abatement without registration. You are required to apply for registration as soon as you cross ₹ 9 lakhs.

[Rajagopalan Ranganathan]

Sir,

I agree with the views expressed by Shri. Sethi Sir.

[Ganeshan Kalyani]

I am also of the same view as expressed by learned experts. Thanks.

AI Summary

Threshold exemption for service tax: total turnover without abatement determines registration requirement and abatement applies only after registration.
Threshold exemption is computed by aggregating total taxable turnover across services without abatement; abatement cannot be used to determine the threshold and may be claimed only after registration, therefore registration must be sought once turnover approaches the notification's trigger.