Variation in turn over -how to handle

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This query is : Resolved

CS VENKATARAMANAN S (Querist)

24 October 2011 If Mr.X started his business 5 years back. His service come under the purview of service tax. First year his turnover was rs. 7 lacs. 2nd year his turnover was 14 lacs. 3rd year his turnover was 8 lacs. 4th year his turnover was 7 lacs. The officer of service tax visited his premises and found that Mr. X has not yet registered with service tax department. So he issued notice to the client and demanded service tax for 3rd and 4th year. The assessee is innocent and even didn't know about service tax. He didn't collect service tax from his customers and this fact also known to the officer of the department. Is the department is tenable in law? if the turnover exceeds more than 10 lacs in one year and below that limit in subsequent years. Is it mandatory for the assessee to collect service tax for the year which the turn over is below the limit? Please clarify

U S Sharma

U S Sharma (Expert)

25 October 2011 14 lacs minus exemption limit ( 10 lacs or 8 lacs check) is liable to tax
next year is liable to tax,
4th year turnover of 7 lacs well get exemption as the turnover of previous year is below 10 Lacs

CS VENKATARAMANAN S

CS VENKATARAMANAN S (Querist)

25 October 2011 Is there any case law or sections for the above decisions?

Abhinav Pandey

Abhinav Pandey (Expert)

25 October 2011 Till the last year service tax is applicable only on receipt so as per your case it will be only liable to pay service if receipt in such year exceeds 10 Lakhs. Check It and whenever it will happen he will liable to pay service tax

Abhinav Pandey

Abhinav Pandey (Expert)

25 October 2011
Once registration is done with authority withdraw of registration is tough process so i will suggest to charge even after below receipt