Benefit of threshold limit to Rs.8 lacs

[Guest]

I am providing taxable services and for the year 2006-07, the status of my billings and receipts for taxable services are as under : 1. Total taxable Billing : Rs. 9.50 lacs 2. Total consecutive payments received : Rs. 9 lacs ( Out of this Rs.2 lacs pertain to the Bills raised for taxable services in financial year prior to 2006-07),hence payments received for bills raised in year 2006-07 is Rs.7 lacs. On going thru the notif. No. 26/2005 and Notif No. 6/05 which defines “aggregate value of taxable services” and “aggregate value not exceeding four lacs rupees” as the sum total of first consecutive payments received during a financial year towards the gross amount,as prescribed under sec-67 of the act , charged by the service provider towards taxable service but……….” , we are under impression that in our case , we can avail the benefit of threshold limit being raised to Rs.8 lacs, as payments received by us for the Bills raised in year 2006-07 is only Rs. 7 lacs which does not exceed the limit of Rs.8 lacs. Am I right ?

[Guest]

Since you have rendered the services in the financial year 2006-07 for the value exceeding rs. 8 lacs, you are not entitled to get any exemption in the financial year 2007-08 irrespective of the amount received actually in the financial year 2006-07.

AI Summary

Threshold entitlement denied where services rendered exceed the threshold irrespective of receipts in that year. Exemption eligibility for service tax is determined by the aggregate value of taxable services rendered in the financial year, not by payments received; if services rendered in the year exceed the threshold, the provider is not entitled to exemption in the subsequent year even if receipts in that year are below the revised threshold.