Aggregate Value of ₹ 10 lakhs ??

[ramkishore gupta]

Dear Sir

Let me know aggregate value to taxable service of 'RS 10 Lakhs 'means after abatement or before abatement allowed?????

For eg If I provide service of ₹ 11,00,000.00 and has an abatement @40 % will it cross the limit of ₹ 10 lakhs exemption?

Thanks

[Rajagopalan Ranganathan]

Sir,

The question of availing abatement will arise only when you cross the exemption limit of ₹ 10 lakhs. Therefore ₹ 10 lakhs limit is calculated by the totaling the gross value charged by you in your invoice till you cross the limit of ₹ 10 lakhs. This is my opinion.

[ramkishore gupta]

Thanks for the reply please also let me know as per the example given above what will be my tax liability??

11,00,0000 x 60%(after considering 40% abatement) 6,60,000 (Taxable Value) -10,00,0000(exemption) = zero or 11,00,0000(Total Value) - 10,00,0000 (exemption) = 1,00,000 x 15% (service tax) = 15000 tax payable

thanks

[KASTURI SETHI]

You are to pay ST on ₹ 1,00,000/-(11,00,000/- - 10,00,000/-). Avail abatement from this amount i.e.1,00,000/-, if admissible.

[Mahir S]

Yes, the views expressed above are correct.

[YAGAY andSUN]

It's Gross Value of Ten Lacs and it is without any abatemet.

[DR.MARIAPPAN GOVINDARAJAN]

In my view also the threshold limit is only for the aggregate amount of ₹ 10 lakhs.

[Ganeshan Kalyani]

Yes the abatement is applicable only on the taxable amount above threshold limit.

AI Summary

Service Tax Exemption Limit Based on Gross Value, Abatement Applied After Crossing 10 Lakhs Threshold A participant inquired whether the aggregate value of 10 lakhs for service tax purposes is calculated before or after abatement. Responses clarified that the 10 lakhs exemption limit is based on the gross value of services provided, without considering abatement. Once the exemption threshold is crossed, abatement can be applied to the taxable amount. For example, if services worth 11,00,000 are provided with a 40% abatement, the taxable amount above the exemption is 1,00,000, resulting in a service tax liability of 15,000. Multiple respondents concurred with this interpretation.