LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Manner of availing Threshold Exemption Limit

CA PRAMOD SARAOGI (Chartered Accountant) (1113 Points)

14 October 2009

What shuold be amount of service tax payable to the Governement :

Finanacial Year Amount Billed Amount Received

Gross S.Tax Net

2005-06 3.50 - 3.50 Nil

2006-07 3.50 - 3.50 Nil

2007-08 7.50 - 7.50 Nil

2008-09 10.00 - 10.00 Nil

0.50 0.06 0.56 Nil

2009-10 5.00 0.05 5.05 30.11

Reply
Follow
Share

3 Replies

Pavan Jain S (Chartered Accountant) (1575 Points)
Replied 15 October 2009

The tax liability for years 2005-06 to 2007-08 is NIL. The liability for 2008-09 is shall be 0.06 but the same will not arise in the year 2008-09. The liability will arise in the year of receipt of amount.

You are not eligible for small service provider exemption for 09-10. Your liability for 09-10 will be Rs. 0.06 [08-09] and Rs. 0.05 [09-10].

The service tax for 09-10 shall be claculated @ 10%. Hence the liability for 09-10 shall be 0.5 and not 0.05

Satish (CA Final Student) (479 Points)
Replied 18 October 2009

The liability will arise only in year 09-10 as all the money is received in year 09-10. The liability will be (30-10) * 10.3% i.e. 2.06

The exemption to small service provider is available if the gross RECEIPTS during previous financial year exceeds the prescribed limit. i.e. for financial 08-09 - 10 lakh, for 07-08 - 8 lakh, for 06-07 & earlier years 4 lakh.

In the given case, full amount is received in 09-10. Hence, Rs 10 lakh exemption is available in that year 09-10. Every rupee thereafter is liable to service tax.

Gautam Joshi (Partner) (361 Points)
Replied 18 October 2009

Hi Pramod,

Question asked by you is not that of registration but I like to put my view here is you should take registration in 08-09 itself as registration is applicable from 9 lakh. Regarding payment both the above friends are true.

Warm Regards.