Service tax for llp firm

Hello Club,

We are an LLPfirm and provide services in the field of team building programs for corporates and similar outdoor fun and training programs.

I have 3 qiuestions..

1) Under what category do we charge the service tax and how much?

2) Currently we are not charging any service tax since the annual turnover is less than 10 lakh. When the turnover crosses 10 lakh within this year, what will happen to the cases where we have not charged service tax before crossing 10 lakh? Do we need to pay tax to the govt on those cases as well that we had not charged the tax on?

3) Since we are availing the exemption, does it mean that our customers have to pay service tax under the reverse charge in sergvice tax provision?

Appreciate your help.

Dear Sudhir

1) From 01.07.2012, with the introduction of Negative list based taxation, you are not required to classify the service under any category. All services other than those specified in the negative list u/s 66B would be considered as a taxable service and be taxed unless specifically exempted under mega exemption notifcation no. 25/2012-ST dated 20.06.2012.

2) No.. Taxable services of aggregate value not exceeding Rs 10 Lakh in a financial year is exempt as per notification no 33/2012 ST dated 20.06.2012 and you are liable to collect and pay service tax only on amount exceeding the said limit of ten lakh rupees. However, you can claim CENVAT credit on inputs, input services and capital goods under the CENVAT Credit Rules, 2004 once you start paying the tax to decrease your net liability.

3) The payment of service tax under reverse charge & joint charges method is limited only to specified services mentioned in the notification no 30/2012-ST dated 20.06.2012. As the service provided by your LLP firm is not included in the said notification (atleast for now !), your customers will not be liable to pay service tax under reverse/ joint charge method.

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Sudhir

CA SHRAVANA DOTA

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