Service tax liabilty

[Navi mumbai sez pvt ltd NMSEZ]

A service tax provider providing taxable service in his individual capacity. The threshold limit is Rs 10 LACS. He has obtained Registration after crossing limit of Rs 9 LACS. In the subsequent month his payment is crossing Rs 10 lacs by a marginal amount of Rs 10,000/- what will be taxable amount for this month payment . Is it on Rs 10,000/- or on total amount of this month payment or on the whole amount including exemption of Rs 10 lacs. The service provider has provided service in the current Financial year.

AI Summary

Service tax threshold: tax applies on amounts exceeding threshold when prior year turnover allows current-year exemption.
Service tax liability hinges on preceding-year turnover and first-year assessment status: if the preceding financial year turnover did not exceed the exemption ceiling, the exemption for the current year can be claimed and service tax is payable only on amounts exceeding that threshold; if the provider was taxable or exceeded the threshold in prior years, the exemption is not available and tax applies to gross receipts in the taxable year.