Service Tax Exemption to Small Service Providers

[KALPESH BHATT]

Hello Sir,

Thanks for your earlier reply.

However in SCN they stated that Income of ₹ 10 Lakhs has been suppressed deliberately and therefore tax is payable on it. Department has reviewed Form 26AS and compared it with form ST 3 and found the difference and accordingly raised the demand in SCN on ₹ 10 Lakhs stating that Income has been deliberately suppressed in ST return.

Hence can you please guide in submitting the appropriate reply.

Thanking You,

Kalpesh

AI Summary

Threshold exemption for small service providers can negate tax demands arising from return mismatches when properly justified.
A demand based on a mismatch between ST-3 returns and Form 26AS does not, by itself, make Service Tax payable where a small service provider has legitimately availed the threshold exemption. Respondents should provide year wise ST-3 and Form 26AS turnover figures and the Service Tax registration date, and submit documentary justification to demonstrate that the unreported turnover was exempt under the threshold rather than deliberately suppressed.