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Service tax limit applicablility

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This query is : Resolved

Hemali Shanghvi (Querist)

18 October 2010 Hi,

I have a client who is into export of IT services and not required to charge service tax. However, recently he has started providing services to Indian companies and is required to charge service tax. Does the limit of Rs. 10 Lacs applicable specifically to Indian revenue or to the overall revenue?

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

18 October 2010 The export value can be excluded for cacluation of the 10 lakhs limit. However the point to be noted is that the input services [ telephone/ insuracne, professionals/ AMC/ Security rent] are eligible for credit even for export and therefore he can utilise the total credit for the payment of the ST for local services.
Further the cusotmer may also be in a position to avail the credit in which case there would be a win win on both counts.

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