Service tax on management consultants

service tax is not related to income but on amount of taxable services provided.

if the amount of taxcable services provided exceeds 9 lacs, he needs to register himself with ST and pay taxes when it exceeds 10 Lacs

hi Sir,

Thanks for your reply.

What if he/she is already registered with ST and taxable service provided to less than 10 Lacs??? Should he still pay ST?

Or he has to pay when it exceeds 10 Lacs even after having registered?

Looking forward to your response.

Rgrds,
Sunil

Sharmaji is correct,

Once amount of taxable services exceeds 9 Lacs he needs to be register with the department, and if taxable services exceeds 10 lacs ST will pe payable from the Re.1 over 10 lacs,and from the next  year service tax will be chargeable from Re.1 of taxable services (No limit of10 Lac will be applicable)

ee.g;

Mr. X is a professional service provider. During the year his taxable service amounts to Rs.8 Lacs.

Then he does not need to pay service tax on the same as taxable services does not exceeded Rs. 10 Lacs,

 In the 2nd year taxable T/O amounted to Rs.12 Lacs,, then he needs to pay service tax on Rs. 2 Lacs (12-10) @ 10.3%. and needs to be registered when T/O exceeded Rs.9 Lacs.

 If suppose in the 3rd year the T/O amounts to Rs.6 Lacs then ST will be payable on whole Rs.6 Lacs.

 And suppose in the 4^th year if T/O amounts to Rs.8 Lacs then no ST will be payable as T/O in the last year did not exceeded Rs. 10Lacs.

Hope this may clear your doubt.

Ketan is right perfectly

Nicely explained by ketan. Thanks

For individual consultants, both service trax and income tax add up to 33.9 + 15 % = about 49 % tax for income over 10 lakh. Is it correct?

Thanks in anticipation

DC Bhargava