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 and SUN]

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

Threshold calculation for service tax exemption uses gross value before abatement; abatement applies to the excess taxable amount.
The exemption threshold is tested by totaling gross invoiced value before abatement; abatements are relevant only after the threshold is crossed and apply to the taxable amount above the limit when computing service tax.