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Small service provider

abanerji (81 Points)

11 March 2008

Small service provider - annual exemption limit increased from Rs. 8 lacs to Rs. 10 lacs with effect from 1st April 2008

A long-time registered service tax assessee received the following payment during financial year 2007-8 :-
   Amount excluding service tax and cess : Rs. 6.50 lacs
   Amount of service tax and cess : Rs. 0.80 lacs
   Amount including service tax and cess : Rs. 7.30 lacs

Upto what turnover level (excluding service tax and cess) during financial year 2007-8, would it allow the Rs. 10 lacs exemption to be availed in financial year 2008-9?

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6 Replies

M.Sriram Shenoy (CA Final) (814 Points)
Replied 11 March 2008

For F.Y 2007-08 - if turnover exceeds Rs.8 lacs excluding service tax. For F.Y 2008-09 - if turnover exceeds Rs.10 lacs excluding service tax.

CA O.P. SINGH (O P Singh & Co.) (426 Points)
Replied 15 March 2008

Mr sriram is correct..

Adv. S Sharma (Lawyer) (574 Points)
Replied 15 March 2008

for the year 2007-08, if urs turnover exceed 8 lakh (suppose 8,00,001) than u hav to pay Service Tax on whole amount i.e. 8,00,001.

for the year 2007-08 your turnovr is 7:30 lakh and u r fall in the scope of Service Tax Exemption.

10 lakh exemption for the year 2008-09. I hope point is clear.

Ravi Jagetiya(CA Final) (Articled assistant) (191 Points)
Replied 18 March 2008

Sachin i am not agrred with ur contention that as soon as any service provider comes in criteria he has to pay ser. tax on retrospectively .

I think he will have to start charging & paying the same to govt on Rs 1 only.

Dilip Darji (392 Points)
Replied 18 March 2008

Dear Sir. Small Scale exemption is linked with the turnover of preceding year.Meaning thereby that if the aggregate value of taxable service rendered by a provider of taxable services from one or more premises has exceeed Rs.10/- Lakhs in FY 2007-08, you are not entitle to exemption and you are required to Service from rupee one from 01/04/08.

OFFICESELVA (Service) (515 Points)
Replied 19 March 2008

First, if the income exceeds Rs.8 Lakhs during the current financial year, it is enough if, tax is paid on income so exceeded. It is an indirect tax. You have to collect and pay. How will collected ST from your client to whom you have rendered service say, in April 2007 now.

Further, if you have to paid ST during current financial year after exceeding the exemption limit, you have to pay service tax from April 2008 onwards.