Advice regarding s.tax applicability

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md shakil (Querist)

12 February 2013 Anyone can help me in this regar

We are a partnership firm which provides services to different corporates. We had billed on last December for which the payment is to be made now. In the mean while we have registered ourself with S.Tax authoritiy.

P/l advice the payment to be received attracting S. Tax.

Regards,

Sakil

Kaushik Vinod

Kaushik Vinod (Expert)

13 February 2013 The Basic exemption can be claimed in this case of 1000000.

The CENVAT is not available up to 1000000.

md shakil

md shakil (Querist)

14 February 2013 The reply is not satifactory because it is well known to all that basic limit is Rs 1000000/-.
We mean that we had billed a sum of Rs 10000/- in the month of Dec'12 then we did not have Service tax registration but from the month of Jan'13 we have taken S.Tax Reg.& the said is to receive in this month i.e Feb'13.
Will it come under Service Tax bracket or not?
Plz advice

Kaushik Vinod

Kaushik Vinod (Expert)

15 February 2013 Dear Shakil,

I assume that aggregate value of taxable service in the last year is up to 10 lacs and you are eligible for claiming the exemption in the current FY 2012-13.

The option to avail the exemption or not to avail the same depends on you Sir since once you give away the exemption it can not be claimed later in the same FY. IF you charge tax then you can avail the CENVAT also.
Nature of Industry and volume of Inputs is most important to decide the same.
Cenvat Credit rules nowhere state registration as a condition for availing Cenvat credit. In J R Herbal Care v. CCE (2010) 253 ELT 321 (CESTAT SMB), it was held that there is no provision in law that Cenvat credit is not available to unregistered manufacturer.

In CCE v. Progressive Systems (2011) 267 ELT 473 (Karn HC DB), it was held that an SSI unit can take Cenvat credit of capital goods received when he was not registered

Please Reply if still doubt persist always ready to discuss.

Thanks

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