Threshold exemption
This query is : Resolved
08 December 2013
where a person has taken a bata franchise and providing services to that as per law exemption of 10 lacs cant be claimed but my query is that is the person is providing services to brand not to other people whether he can avail or not..
08 December 2013
I am not clear on your question, is it related to job work or what? because trading per se exempted in Law.
02 August 2025
In your query, the individual has taken a **Bata franchise** and is providing services under that brand. Here's a detailed explanation regarding **threshold exemption under service tax law** (pre-GST era, assuming the context is before July 2017):
---
### 🔍 **Background:**
Under the **Service Tax regime** (before GST implementation), a **threshold exemption of ₹10 lakhs** was available under **Notification No. 33/2012 – ST** dated 20.06.2012. This meant that a service provider whose aggregate turnover of taxable services did not exceed ₹10 lakhs in the previous financial year could claim exemption in the current year until the limit was crossed.
---
### ❌ **Exception to Exemption – Brand Franchisee:**
If the person is **providing services under a brand name or trade name**, **the exemption is not available**.
As per the **explanation (ii) to the notification**, the threshold exemption **does not apply** to:
> *"such value of taxable services which are provided by a person under a brand name or trade name, whether registered or not, of another person."*
---
### ✅ So, applying to your case:
* **Franchise of Bata** → You're **providing services using a brand name of another person (Bata)**.
* Even though you're providing services **to Bata** (and not to the general public), **the brand name is involved**.
* Therefore, the \*\*₹10 lakh threshold exemption is **not available** to you under this notification.
---
### 💡 Summary:
| **Criteria** | **Status** |
| ----------------------------------- | ----------------------------- |
| Providing services under own name | Threshold exemption available |
| Providing services under Bata brand | ❌ Exemption **not available** |
| Even if services are only to Bata | ❌ Still **not eligible** |
---
### 📌 Recommendation:
* **Register for service tax** (pre-GST) or comply with **GST registration** (if under GST now).
* Track turnover from the beginning to avoid non-compliance.
---
### 🔍 **Background:**
Under the **Service Tax regime** (before GST implementation), a **threshold exemption of ₹10 lakhs** was available under **Notification No. 33/2012 – ST** dated 20.06.2012. This meant that a service provider whose aggregate turnover of taxable services did not exceed ₹10 lakhs in the previous financial year could claim exemption in the current year until the limit was crossed.
---
### ❌ **Exception to Exemption – Brand Franchisee:**
If the person is **providing services under a brand name or trade name**, **the exemption is not available**.
As per the **explanation (ii) to the notification**, the threshold exemption **does not apply** to:
> *"such value of taxable services which are provided by a person under a brand name or trade name, whether registered or not, of another person."*
---
### ✅ So, applying to your case:
* **Franchise of Bata** → You're **providing services using a brand name of another person (Bata)**.
* Even though you're providing services **to Bata** (and not to the general public), **the brand name is involved**.
* Therefore, the \*\*₹10 lakh threshold exemption is **not available** to you under this notification.
---
### 💡 Summary:
| **Criteria** | **Status** |
| ----------------------------------- | ----------------------------- |
| Providing services under own name | Threshold exemption available |
| Providing services under Bata brand | ❌ Exemption **not available** |
| Even if services are only to Bata | ❌ Still **not eligible** |
---
### 📌 Recommendation:
* **Register for service tax** (pre-GST) or comply with **GST registration** (if under GST now).
* Track turnover from the beginning to avoid non-compliance.
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