Basic exemption limit under service tax act

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Querist : Anonymous

Querist : Anonymous (Querist)

21 January 2012 My client is an authorised dealer of two wheeler company doing both sales n service. can he claim threshold limit benefit under service tax act? This query I had posted earlier and got Expert reply that it can be availed. can u please provide me with any case law to that effect either at commissioner or Tribunal level? The Service Tax authorities have raised demand of service tax from my client from first receipt and insisting that threshold limit exemption cant be availed.

Arun Gulati

Arun Gulati (Expert)
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22 January 2012 As per Explanation B to Notification No. 6/2005-ST, 01-03-2005, the “aggregate value not exceeding Rs. 10 lakh” does not include payments received towards such gross amounts which are exempted from the whole of service tax leviable. But in your case, you are doing sale which is not at all covered under Finance Act, 1994. Therefore, one the Notification is cleared itself, I don't think so any case study is required but i will try to find some. Can you tell me what reason they are giving. One more thing they will cal you and make pressure to deposit service tax but dont deposit the same as thereafter they will issue penalty notice.

Querist : Anonymous

Querist : Anonymous (Querist)

22 January 2012 The dealer also runs service station along with sales. The department is insisting that labour charges are to liable to service tax from first receipt and threshold limit benefit cannot be availed on grounds that it is service under brand name. Please guide.

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