ST on Labour charges

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sathyam (Querist)
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03 February 2009 Dear Experts,
Is service tax attracted for labour charges ( labour charges for machining work). Last year turnover Rs.780000/-. Turnover for FY 2008-09 is 2700000/- upto January 2009. For Which portion st is to be paid? 27 lacs or 17 lace (ie 27 lacs less 10 lacs).Pls clarify

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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03 February 2009 You have to pay service tax on 27lakhs.

Once service tax is applicable you have pay from the re.1.

There is not basic exemption like income tax.

VINAYAK D PRABHU

VINAYAK D PRABHU (Expert)
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03 February 2009 Hi,
It attracts Serivec tax under Business Aauxilliary Services.
just for a accademic interest i am giving the following:
The annual threshold limit of service tax exemption for small service providers has been
increased from Rs.8 lakh to Rs.10 lakh with effect from 01.04.2008 by amending
Notification No.6/2005-ST dated 01.03.05 vide Notification No. 8/2008 ST dated
01.03.08.
Consequent upon the increase in the threshold exemption limit from Rs.8 lakh to Rs.10
lakh, the annual turnover limit for obtaining service tax registration has also been
increased from Rs.7 lakh to Rs.9 lakh with effect from 01.04. 2008 by amending
Notification Nos.26/2005-ST and No.27/2005-ST, both dated 07.06.05 vide Notification
Nos. 9/2008 ST and 10/2008 ST, both dated 01.03.08 respectively

In view of above, i believe entire Rs.27 Lacs attracts Service tax @12.36%.

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