12 November 2011
As per NN 06/2005 dated 01.03.2005 last amended by NN 08/2005 dated 01.03.2008, you are not required to pay service tax on initial receipt upto rs. 10 lac. Therefore, you are required to pay service tax on rs 4 lac only.
However as per Section 73A of Finance Act 1994, if the assessee collect any amount in excess of what is actually required to be collected. In that case assessee is required to deposit the excess amount of service tax to the CG immediately.
In your case you are required to deposit service tax on rs 9 lac.
14 November 2011
Thanks for your prompt reply. Also, i want to know what happens in the net year, when the fees are say 14 lakhs. will i get the exemption of 10 lakh again in the next year. Or will i have to pay the service tax on 14 lakhs.
14 November 2011
Rs.10 lakhs exemption limit will allowed only one time. in next year service tax will be leave on entire amount of service receipts. in your case service tax will be on Rs. 14 lakhs.
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