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.

AI Summary

Service provider must consider full turnover of 15 lakhs for Service Tax exemption; registration needed after 9 lakhs. An unregistered service provider offering Business Auxiliary and Restaurant services inquired about calculating the threshold exemption limit of 10 lakhs for Service Tax registration. The provider's turnover was 6 lakhs from Business Auxiliary services and 7 lakhs from Restaurant services in the previous financial year. The query involved whether to consider the full 15 lakhs or 8.8 lakhs (after a 60% abatement on Restaurant services) for the exemption limit. Respondents advised that the total turnover of 15 lakhs should be considered without abatement for the threshold, and registration is required once 9 lakhs is exceeded.