Clarification regarding 10 lakh exemption limit

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Aditya

Student CA Final

47 Points Posted on 08 November 2013

Hello,

There is exemption from Service Tax if taxable services does not cross 10 lakhs.

Is the services provided to SEZ, which are exempt, to be included while counting such limit?

Because technically they are taxable service, but because you are providing to SEZ it is exempt..

Kindly guide

Replies (2)

CA. Narottam Kumar Rawat

Indirect Tax Consultant

333 Points Posted on 08 November 2013

Dear Aditya,

In case services provided to SEZ are exempt by Adhoc means you have complied with all the conditions of exemption notification then the service provided will not become part of turnover to compute exemption of Rs. 10 Lac.

Text of Notification 33/2012-ST is as under and it clearly excludes exempted portion for computation of adhoc exemption of Rs. 10 Lac:

(B) “aggregate value” means the sum total of value of taxable services charged in the first consecutive invoices issued during a financial year but does not include value charged in invoices issued towards such services which are exempt from whole of service tax leviable thereon under section 66B of the said Finance Act under any other notification.”

CA AJAY GUPTA

PRACTICE

60 Points Posted on 08 November 2013

Hi,

Exempted amount of services provided to SEZ units will not be considered in arriving at exemption limit of Rs 10 Lacs. For the purposes of regn. any services exempted thru notification shall not be included. Services Provided to SEZ have been exempted thru special notification, hence not to be included. You need to calculate the exemption amount without considering services to SEZ units.

Rgds,