08 March 2016
A CA firm with Partners ABC has a turnover of 25 Lacs. One of its Partners, Mr. A opens his own proprietary firm and renders auditing services and signs BS's. He continues to be partner in the Firm also and signs BS's as Partner of firm. Now Turnover of Partnership firm is 17 Lacs and turnover of Proprietary Firm is 8 Lacs. Q1.Will Proprietary firm of A get threshold exemption of 10 Lacs and not pay Service Tax on 8 Lacs ? Q2. will clubbing provisions apply and Rs. 8 Lacs be added to 17 Lacs of Partnership firm for Service Tax?
08 March 2016
No, the turnover of partnership firm will not be clubbed with that of proprietorship firm. They both are separate and distinct entities in the eyes of law.
Therefore, you are entitle to avail SSI exemption of Rs. 10 lakhs in proprietorship concern
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