Benefit of exemption limit

[Asked by Guest]

we just registered with the service tax dept. under business auxilary services head. we are commencing new business and have not provided any services till now.( We got registered out of ignorance of 4 Lacs exemption provision). can we claim the benifit of Rs. 4 Lacs exemption now inspite of getting registered with Service Tax Dept. If Yes, Do i need to file the Nil Half yearly Returns?

[Madhukar N Hiregange]

Dear Poonam, Registration has nothing to do with claiming of the exemption under 6/2005. You would however have to file the returns indicating the amount of taxable servcies billed and received. After you corss 4 Lakhs of receipts of taxable servcies you wouldbe requried to start payment. If it is not likely in the next 2 years then you could surrender the registration stating that you are unlikely to cross 3 Lakhs ( at 3 L you are toget registered)

AI Summary

Exemption threshold: registration does not forfeit exemption; file returns and pay service tax once receipts exceed threshold.
Registration does not bar entitlement to the prescribed exemption; registrants must file returns disclosing taxable services billed and receipts received. Tax payment obligation begins only when aggregate receipts exceed the prescribed exemption threshold. If a registrant reasonably expects not to cross the registration threshold, surrender of registration is an available administrative option.