Small Service Provider exemption

[Joice Jacob]

Dear Expert,

I have a partnership company from October 2007, which provide 100% service under Consulting Engineer category (Small Service Provider). During FY 2007-08, we didn't have any business. During FY 2008-09, we had business for Rs.570000/-. And during the FY 2009-10 we have done 870000/-. Since we new that we may cross the exemption limit of Rs.10 L, during the FY 2010-11, we had taken the Service Tax registration and paid Collected and paid the Service tax for the service above 10 lakhs and did upto Rs.1470000/- (Service tax for Rs.470000/-). As we thought that our gross service would not exceed 10 lakhs, we have not collected any service tax (also not paid, other than the due of FY 2010-11) for the FY 2011-12 till date. But at this situation we are going to exceed 10 lakhs from the next month onwards (August 2011) due to an unexpected order to us (Thank God). 

Dear Expert, my question are that, 1) should I collect the service tax for the amount which I have already provided till date (Which is about 9 laks) ?

2) Or we need to collect and pay service tax only for the amount above 10 L ?

3) what would be my position in FY 2012-13, since I may cross 15 lakhs.

Your kind advice is requested.

Joice Jacob.

AI Summary

Small service provider exemption: previous-year turnover above threshold removes exemption and tax payable from start of next fiscal year.
Exemption depends on the previous year's taxable turnover: if prior-year turnover exceeded the exemption threshold, no exemption applies in the next fiscal year and service tax must be collected and remitted from the first rupee charged from the start of that fiscal year; tax collected cannot be retained, erroneous collections must be refunded to the payer, and interest and penalties may apply for non-compliance.