Availability of exemption

[MANOJ JAIN]

A person having income from commissions,(which is taxable under BAS),of Rs. 725000.00 in FY 06-07.Threshold exemption being Rs. 400000.00) In next FY i.e. 07-08, he earns a commission of Rs. 890000.00 (Threshold Exemption limit being 800000.00) In the next FY i.e. 08-09, he earns commision of Rs. 1950000.00 (Threshold exemption limit being Rs. 1000000.00) Can anybody give suggestion, what amount would be net taxable in each year? Can we claim exemption of Rs. 400000.00, 800000.00 and Rs. 1000000.00 as exemption in each respective year. I presume, it is available for all three years on the contention as under: Rs. 400000 exemption is available for Ist year. Rs. 800000 exemption available for 2nd year because income for previous year was less than Rs.800000.00. Rs. 1000000.00 exemption available for 3rd year because income for previous year was less than Rs. 1000000.00. I am not sure about my contentions.Can anybody will help me out. Manoj Jain

[madhavvan n]

the exemption limit as mentioned by you is one time it is not on yearly basis as per provisions of service tax and it is for all taxable services put together. hence you will be liable for service tax in fy 06-07 itself after availing the exemption limit of rs. 400000 and there after you will be liable for service tax on rs. 8.90 lacs in fy 07-08 and rs. 19.50 lacs in fy 08-09 this is unlike income tax where you can take benefit of income slabs on yearly basis

[Guest]

As per the provisions of notification no. 6/2005 regarding exemption to small service providers (SSP), eligibility to claim exemption is to be examined year to year basis, irrespective of the fact that you were paying service tax in the previous year or not. It appears that for each financial year mentioned with turnover of the current and previous year, it is clear that turnover of the previous year is not exceeding the maximum limit prescribed and therefore for each year you can claim exemption. But for the year 2009-10 you can not claim any exemption since your turnover of the previous year is exceeding 10,00,000.

[Mukesh Kumar]

I agree with the views expressed by Mr. Rama Krishna

AI Summary

Clarification on Service Tax Exemptions: One-Time Benefit vs. Annual Claim for Commission Income; No Exemption in FY 09-10. A discussion on a forum addresses the availability of service tax exemptions for a person earning commission income over several financial years. The initial query suggests that exemptions of Rs. 400,000, Rs. 800,000, and Rs. 1,000,000 are available for the fiscal years 06-07, 07-08, and 08-09, respectively. One respondent clarifies that the exemption is not yearly but a one-time benefit, meaning tax liability begins in FY 06-07. Another respondent notes that exemptions can be claimed yearly if the previous year's turnover is within limits, but no exemption is available for FY 09-10 due to exceeding the threshold.