Minimum Limit on which service tax is applicable

[Monika Mittal]

We have started a new Partnership Firm in which we are purchasing the goods from outside the state and we have to pay the freight on it. Service Tax is not paid by the transporter. In Service Tax on the freight is to be paid by us. What is the mininum limit upto which service tax is not applicable if the freight is to be paid by us.

[CA Rachit Agarwal]

If the value of taxable services exceeds Rs. 9 Lacs, then registration with the Service Tax department is must.

Further Service Tax will be payable if the taxable services exceeds Rs. 10 Lacs.

Hence exemption limit has been given upto Rs. 10 Lacs

[Sharad Aggarwal]

SIR,  WOULD LIKE SAY THAT THE OPINION GIVEN BY THE RACHIT JI IS NOT APPLICABLE

ON YOU. BECAUSE GENERAL EXEMPTION IS ONLY GIVEN TO SERVICE PROVIDER AND NOT THE SERVICE RECEIVER LIKE IN UR CASE. IN UR CASE NO EXEMPTION WILL BE ALLOWED BECAUSE YOU ARE SERVICE RECEIVER AND NOT SERVICE PROVIDER. SERVICE TAX TO BE PAID ON FIRST TRANSACTION. IF AMOUNT OF GR IS LESS THAN RS. 750 THEN EXEMPTION IS AVAILABLE ON THIS PARTICULAR CONSIGNMENT. FURTHER IMMEDIATELY TAKE SERVICE TAX NUMBER AND PAY SERVICE TAX WITHOUT ANY FURTHER DELAY. IF YOU ARE CONSIDERING OR THINK THAT ANY ONE IS SAYING THAT EXEMPT UP 10 LAKH  IS AVAILABLE TO YOU THEN IT IS TOTALLY WRONG....... YOU CAN ALSO TALK ON MY MOBILE NUMBER 098728-35925 AND YOU CAN ALSO SEE NOTIFICATION NUMBER 6/2005 ST......

THANKS SIR

[CA Rachit Agarwal]

I would like to bring to your kind notice that Rs. 10 Lacs exemptions limit is available. Apart from about Rs. 750 limit per consignment is available to all the assessees tax payers who have registered with the department and has obtained the Service tax registration number.

[CA Rachit Agarwal]

As regard the Notifications 6/2005 dated 01.03.2005 as follows:

In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts taxable services of aggregate value not exceeding ¹[ten lakh rupees] in any financial year from the whole of the service tax leviable thereon under section 66 of the said Finance Act......

Exemptions has been granted to the taxable services.

[Chandramauli Dwivedi]

It's the matter of G.T.A. and in case of Partnership Firm single consignment up to Rs.750/- exempted and above Rs.750/- the firm has legal obligation to registered with S.T. Deptt. and deposit service tax on whole freight inward.
 

[Vinay Sharma]

Dear Sir,

I agree with Mr. Sharad Aggarwal, he rightly said that exemption limit of Rs. 10 Lacs is applicable for service provider and not the service receiver. In case of GTA, service receiver is the person liable to pay service tax therefore you are liable to pay service tax.

AI Summary

Service receiver liability for freight services: recipient must register and pay service tax; per consignment exemption may apply.
Liability for service tax on freight under GTA rests on the service receiver: consignment-specific low-value exemptions apply for consignments below a defined threshold, but consignments above that threshold require the recipient to register and remit service tax on the whole freight. An aggregate-year exemption exempts taxable services up to ten lakh rupees from service tax, while registration becomes necessary once taxable services exceed the registration threshold.