Service tax exemption of 10 lakhs

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Harshal Chhajed (Querist)
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11 December 2016 One of my client is having franchisee of SIP Abacus (Gross Receipts Rs 1,00,000). As it comes under using brand name, 10 lakhs exemption is not available and so he has taken the service tax registration. He also provides 2 more services 1) Private Tuition Classes for 10th standard students(Gross Receipts Rs.3,50,000) and 2) Renting of Immovable Property (Gross Receipts Rs. 1,00,000). He pays service on franchisee service regularly. Will he be liable to pay service tax on other 2 services provided by him? Can he claim service tax exemption of 10 lakhs for the other 2 services and pay service tax on franchisee services only?

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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11 December 2016 Once you come under services tax bracket than all services provided by you taxable, you will not able to claim Threshold limit for each services.

VIPIN GUPTA

VIPIN GUPTA (Expert)
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14 December 2016 As per notification 33/2012 (i)" the provider of taxable service has the option not to avail the exemption contained in this notification and pay service tax on the taxable services provided by him and such option, once exercised in a financial year, shall not be withdrawn during the remaining part of such financial year"; That means if you start paying service tax on one service you have to pay service tax on rest of your taxable services.

Harshal Chhajed

Harshal Chhajed (Querist)
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15 December 2016 Thankyou for your reply.
In your reply you have stated that provider of taxable service has option not to avail the exemption of 10 lakhs. But in case of using brand name, the exemption is not available. Hence service tax has to be paid on the SIP Abacus service from Re.1. But thus this mean that I have to pay service tax on other services also? The turnover of all services has never gone above 6 lakhs in last 3 years.

VIPIN GUPTA

VIPIN GUPTA (Expert)
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16 December 2016 yes you have to pay although I do not have any case law on this

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