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Service Tax Applicability

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Raajasekar

Finance Manager

26 Points Posted on 14 July 2009

Please update me on when the service tax is to be charged if the turnover crosses the prescribed limit?

For example : a service provider expects that the turnover may cross the prescribed limit but not sure. Whether he should start charging service tax from the start of financial year or from the point when the turnover crosses the prescribed limit in that financial year. And when he should get registered with Service Tax Department?

Replies (3)

chintan mehta

Chartered Accountant

263 Points Posted on 14 July 2009

he is liable to pay service tax if services exceeds 10 lakhs .. but he has to register himself once he crosses 9 lakhs

CA Shilpi Jain

Indirect taxation

126 Points Posted on 15 July 2009

If during the previous financial year the limit of Rs. 10L was not crossed (i.e. the receipts for the services rendered) then in the current year the asseesse need not pay service tax on the first Rs.10L received from its customers.

Though It would be beneficial if the asseessee pays ST on the first 10L also as he wil be able to claim cenvat credit on the input duties and service tax paid which would otherwise not be available for the inputs used during the receipt of the first Rs.10L during the year.