20 September 2007
A firm is authorised service centre of LG AC. It provide repair and maintenance to all those customer which have purchased AC and falls under guarantee period, on behalf of the company. It receive certain fixed monthly ckarges from the company for this. It also do its on repair and maintenance work of all AC which is not under guarantee period or otherwise. It got registered with service tax department last year and paid service tax though its toal receipt was much less than Rs 4 lac. This year the firm did not pay any service tax nor it collected from the LG Company nor from custormer in the impression that the limit has been increased to Rs 8 lac and it is entitled for the basic exemption limit. Now when it submitted a letter of surrender of its registration with service tax department, they informed that this firm is not entitled for basic exemption due to some circular i.e. the Authorised Service Centre are not entitled for basic exemption. Please clarify the correct legal position with circular if any.
The right category of service in the given case is 'Management Maintenance or Repair'. Section 65 (105) (zzg) read to gether with 65 (64) of the Finance Act 1994 confirms clearly.
An Authorised Repair/Service Centre of the given nature is surely entitled for basic exemption given by Notification No 6/2005 Dt 1.3.2005 as well as latest notifications.
ST authorities could not have so wrongly denied the aforesaid. Please recall the exact words of ST authorities which is relating to your case's fact only.
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