Friends, I've got a little doubt wrt Notification no. 6/2005. As per the notification, consecutive receipts upto 10 lakhs are suppose to be exempt from any service tax liability. However, consider this situation:
Suppose a newly qualified CA starts his practice for the first time in Feb of 2009 and renders taxable service in 2008-09 amounting to Rs. 8 lakhs and receives only 2 lakh as payment, then his tax liability would be nil as per Notification no. 6/2005. For 2009-10, the CA would again be classified as an SSP since taxable service rendered is less than 10 lakhs. Now in 2009-10, CA again renders taxable services amounting to 8 lakhs and receives full payment for the year plus the outstanding 6 lakhs from previous year. His total receipts for 2009-10 then amounts to 14 lakhs and is liable to pay service tax in excess of 10 lakhs as per N No. 6/2005 which is 10.3% on 14-10 lakhs = 41,200.
What I don't understand is why should the CA be taxed on receipts which he receives for taxable services provided in the previous year when he was an SSP and pay the tax in the current year when he is again an SSP? Correct me if I am wrong in framing the question as I've just started with the basics of Service Tax in IPCC level.
Thanks
CAclubindia
