TaxTMI 
TaxTMI 
As per the contract we will raise the bill 10 lacks per month to our cleint as consulatancy charges. As per Notification No. 6/2005-ST up to 4 lacks have been exampted from service tax. My query is, Service tax is to be charge on Rs.10 lacks + S.T. or 6 lacks only? (10 lacks-4 lacks + ST), please give your expert views.
Service tax including or excluding exemption limit
27 Sep 2006 
2 Replies 
1563 Views Asked by
Service tax exemption allows tax only on receipts exceeding the prior-year turnover threshold, not on entire billed amounts.
Eligibility for the exemption under Notification No. 6/2005-ST requires that taxable services in the previous year did not exceed the four-lakh threshold; if eligible, exemption in the current year applies up to that limit and service tax is payable only on the value of taxable services exceeding the four-lakh exemption, so tax need not be charged until cumulative receipts surpass the exempt amount. (AI Summary)
Eligibility for the exemption under Notification No. 6/2005-ST requires that taxable services in the previous year did not exceed the four-lakh threshold; if eligible, exemption in the current year applies up to that limit and service tax is payable only on the value of taxable services exceeding the four-lakh exemption, so tax need not be charged until cumulative receipts surpass the exempt amount. (AI Summary)