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Threshold Exemption Limit

Chartered Accountant


My clients had issued biils for  the service provided in the year 2006-07 as under :

basic amount      Service Tax rate   Service Tax    Bill Amoun 

400000                     NIL                        NIL                400000                 Payment realised in 2006-07

200000                  10.2%                     20400            220400                Payment realised in 2007-08

100000                   12.24%                 12240             112240               Payment realised in 2007-08

Bill in the year 2007-08 

400000                     Nil                       Nil                    400000                Payment realised in 2007-08 

What shud be the amount of threshold exemption  in the year 2007-08. will it be the entire amount of Rs. 8.00 Lakh  realised in the year 2007-08 or Rs. 400000 Billed and realised in the year 2007-08. If it is Rs. 8.00 Lakh , then what will be the treatment of the amount of Service Tax realised from the customers? 

 

En

  The Scheme of Threshold Exemption Limit applies to service providers whose aggregate value of Taxable services provided during the preceding financial year was less than the specified thresholf limit.

 
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Chief Financial Officer and Co

It should be based on the actual period of provision of taxable service.


Total thanks : 1 times

 
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Chartered Accountant


The language of the Law doesnt reflect that it should b based on the provisions of Taxable Service

 
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Chartered Accountant


The exemption is available where the taxable services provided ( whether received or not) exceeds the limits prescribed.

For example if one were to claim the exemption of Rs.10 lakhs for the year 2008-09 then the total taxable services provided ( whether recived or not) for 2007-08 should not have exceeded Rs10 lakhs.

Hope this clarifies the issue. 

 
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Chartered Accountant



 

 
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Chartered Accountant



 

 
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Chartered Accountant



 

 
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Chartered Accountant


There is no doubt that

 
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Chartered Accountant


There is no doubt that if one were to claim exemption of Rs. 10 Lakh for the year 2008-09 then the total services provided (irrespective of the amount realised ) for the year 2007-08 should not have exceeded Rs. 10 Lakh. I guess you have not understood my question properly. During the year 2007-08 for the first time the Service provider  has provided services in respect of Renting of immovable and the total amount billed during the year was Rs. 968540 lakh ( Rs. 8.00 lakh without adding Service Tax being covered under the threshold exemption limit and the reamaing amount of Rs. 1.50 lakh by adding service Tax of Rs. 18540 

 
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Chartered Accountant


Out of this only Rs. 6.oo lakh received during the year 2007-08 and claimed exempted during that year (although bills raised towards exempted services were Rs. 8.00 Lakh without knowing that the paymenr would not be received in 2007-08 ) and the remaining amount of Rs. 368540 have been received in the year 2008-09 in addition to the amount of Rs. 5.00 lakh billed and received in 2008-09 (without charging Service Tax)  Thus the total receipts in 2008-09 would be Rs. 868540 including service Tax , which is below the threshold exemption limit

 
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