Service tax-small service providers

There will be certain circumstances where a small service provider needs registration. For Eg. if he is going to apply for a tender in a govt or any other organsation they will prefer registered businesses rather than non registered ones. 

Hello, As a SSP, you can't avail Cenvat credit on input services used in providing taxable services. Next you can't avail credit on capital goods, received during the period of availing exemption. Thirdly, once opted for the scheme, you cant forgo for rest of financial year. Fourth, while availing scheme, you need to reverse the cc on inputs lying in stock. Fifth, balance in cc will lapse. Sixth, you can't avail cc, it becomes your cost which you pass on to service receiver and thus, he may be reluctant to buy costly service. Seventh, if you cross the limit of Rs. 10 lakhs during FY, you need to deposit tax in cash! CC cant be utilized as it has already lapsed.

Oh okay I get it sir:-)now the concept s clear:-) Thank you so much @ abhijeet @ praveen:-)

Well explained by Abhijeet. In other words, one reason for not availing the threshold exemption of Rs. 10 Lacs is that the service provider do not intend to break the cenvat credit chain, when he and service receiver both are eligible to avail & utilize cenat credit.