ABATEMENT Vs EXEMPTION

[Abhisek Tibrewal]

On availing abatement under notification no.- 34/2011-S.T. ; can the threshold exemption limit of Rs. 10 Lakhs be claimed, being the first year of operation of the hotel (accomodation service provider) ?

[Deepak Nagori]

Dear Abhishek,

Yes the exemption limit of Rs. 10 lacs can be availed and service tax shall be payable for billings in excess of Rs. 10 lacs for the first year. From next year, though, you would have to charge service tax right from the beginning.

Regards

CA Deepak Nagori

[RadheyShyam Mangal]

The Exemption will be on first 10 lacs being gross amount without any abatement which may be noted.

AI Summary

Hotels Can Avail Rs. 10 Lakh Exemption in First Year Under Notification 34/2011-S.T., Pay Tax Beyond Limit A query was raised regarding whether a hotel, as an accommodation service provider, can claim the threshold exemption limit of Rs. 10 lakhs while availing abatement under notification no. 34/2011-S.T. in its first year of operation. One response confirmed that the exemption limit can be availed, with service tax payable on billings exceeding Rs. 10 lakhs in the first year, but from the next year, service tax must be charged from the start. Another response clarified that the exemption applies to the first Rs. 10 lakhs of gross amount without abatement.