Exemption limit for service tax

What you are currently doing is correct.

the exemption limit is now Rs 1000000.

if the turnover exceeds the exemption limit

then the tax will be paid on the additional that is over and above the exemption limit

I am running a propriotary firm involved in engineering activities. Thinking that I will cross 10 lac exemption limit, I have charged service tax to client so far. Now itseems that I will not cross the 10 lac limit. My question is

1. Do I have to deposit the service tax component to the govt in future?

2. Can I claim refund of the service tax deposited at the end of financial year if I prove that I have not crossed the 10 lac limit

3. This is my first year of operation. Do I have to pay service tax for entire amount? In forum I have read cotrasting opinion about this. Can enybody give refrence to the service tax rules regarding this matter?

1. You have to deposit the collected service tax with the department.  The sevice tax yet to be reallised should also be deposited. You have to charge service tax for the rest of financial year.

2. A big No.

3. Eventhough it is first year of operation, you have to pay service tax for the entire amount. Because before law, you have decide to forego SSI exemption and to pay service tax on your entire income.

Am I clear?

Thanks a lot...

What is SSI Exemption? How to get it? How it would have helped me as engineering consulting firm? Can I get it for my future transactions?

Yogesh

If your total taxable income during the current financial year is less than Rs.10 Lakhs, you can avail SSI exemption next year. By availing SSI exemption, you should not charge service tax in your bills raised on or after 01/04/2009 (upto Rs.10 Lakhs thershold limit).  There are no other requirments.

Regarding your other query, it depends on  your clients.  If they are also registered with Service tax department and availing Cenvat credit, they would prefer to deal with you.(if you are charging sevice tax.).

My Service tax in this year only 4Lacs and Limit is 10 lacs.

Now We quoted one tender for IFFCO and My quoted raete is 4.25 lacsper yeer work.  For 2 Years contarct total value is 8.5 lacs.

IFFCO Demand Service tax No - What can i DO Please guide me

Rs 10 lacks

Exemption limit of 10 lacs is the amount the which is the upper limit for not paying service. However, the moment the Gross value of Services provided exceeds Rs 10.00 lacs, Service Tax @ 12.36% has to be paid subject to abettment.

M.Srinivas Kumar

Rs.10 LAKHS ONLY!!!

The first point to be considered is :

The threshold limit is applied on the basis of billing done in the immediately preceding year and not on the basis of the services received in the immediately preceding year. If services provided during the FY 2007-08 is below Rs. 10 lacs irrespective of the amount received, then during the current financial year exemption of Rs. 10 lacs will be available from the amount received during the current FY. But of services provided in Fy 2007-08 exceeds Rs. 10 lacs , there will not be any exemption available during the current FY 2008-09 even if the amount received is below 8 or 10 lacs. Thus the threshold limit has twin applicability. Limit is decided on the basis of the Billing/Services provided in the precedeeng year and exmption would be availed from the aggregate receipts of the Current year.