Service Tax Applicability

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This query is : Resolved

Parikh Navin Keshavlal (Querist)

27 May 2010 Sir,
In first year, service provider has more than Rs. 10 lak turnover. He gets service tax number and pays service tax on above Rs.10 lak turnover.
In the next year his turnover remains 5 lak.
Again in the third year, his turnover remains 5 lak and he does not hope to have more turnover.
What should he do ?
1. In second year is he supposed to pay service tax?
2. In the third year also is he supposed to pay service tax?
3. Suppose he surrenders his service tax number in the second or in third year, can he get again service tax number when his turnover exceeds taxable limit ? Can he again get threshold limit exemption ?

Thanks

Shyam Lal Naik

Shyam Lal Naik (Expert)

27 May 2010 Two condition are required to be fulfilled for availing the SSI exemption.

1. Taxable Turnover does not exceed Rs. 10L in the previous year, and
2. Taxable Turnover does not exceed Rs. 10L during the current year.

Q1. Exemption not available, as the Turnover of Year 1 exceeds Rs. 10L.

Q2. In the third year, he can opt for availing the exemption, as he fulfils both the conditions.

Q3. He can not surrender Registration certificate in Year 2. He can surrender in Year 3. He can again apply for registration once his taxable Turnover exceeds Rs. 9L. He can again avail the exemption.

Parikh Navin Keshavlal

Parikh Navin Keshavlal (Querist)

27 May 2010 Thanks a lot !!!

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