Threshold Exemption Limit

It should be based on the actual period of provision of taxable service.

The exemption is available where the taxable services provided ( whether received or not) exceeds the limits prescribed.

For example if one were to claim the exemption of Rs.10 lakhs for the year 2008-09 then the total taxable services provided ( whether recived or not) for 2007-08 should not have exceeded Rs10 lakhs.

Hope this clarifies the issue. 

There is no doubt that

There is no doubt that if one were to claim exemption of Rs. 10 Lakh for the year 2008-09 then the total services provided (irrespective of the amount realised ) for the year 2007-08 should not have exceeded Rs. 10 Lakh. I guess you have not understood my question properly. During the year 2007-08 for the first time the Service provider  has provided services in respect of Renting of immovable and the total amount billed during the year was Rs. 968540 lakh ( Rs. 8.00 lakh without adding Service Tax being covered under the threshold exemption limit and the reamaing amount of Rs. 1.50 lakh by adding service Tax of Rs. 18540 

Out of this only Rs. 6.oo lakh received during the year 2007-08 and claimed exempted during that year (although bills raised towards exempted services were Rs. 8.00 Lakh without knowing that the paymenr would not be received in 2007-08 ) and the remaining amount of Rs. 368540 have been received in the year 2008-09 in addition to the amount of Rs. 5.00 lakh billed and received in 2008-09 (without charging Service Tax)  Thus the total receipts in 2008-09 would be Rs. 868540 including service Tax , which is below the threshold exemption limit

Now my query is : (1) Service Tax has not been been charged on Rs. 8.00 lakh (2) Tax has been charged only on Rs. 1.50 lakh in 2007-08 . Threshold exemption of Rs. 6.00 Lakh only has been claimed in 2007-08  which is the amout realised in that year only. (3) what should be the treatment of Rs. 3.50 lakh Plus Rs. 18540 realised in 2008-09 and also Rs. 5.00 Lakh billed and realised in 2008-09. whether exemtion wud b available on the entire amount of Rs. 850000 or 868540 realised in 2008-09 or only on Rs. 5.00 Lakh billed and realised during 2008-09. If exemption is available for the amount billed in 2007-08 , what wud be the treatment of the Service tax already realised from the service user whi might have claimed cenvat credit for the same

As you realise that the threshold exemption limit applies only if the value of the taxable services provided (payment for which is received in the year billed or not ) in the preceeding financial year did not cross the threshold limit applicable for the year of billing . In your above example the value of taxble service provided in the year 2007-08 is

well above the prescibed threshold limit i.e., 8 lakhs applicable (w.e.f 01.04.2007 to 31.03.2008) , so naturally he would not be eligible for exemption under Notification 6/2005-ST dated 01.03.2005(as amended) for 2008-09 and hence he has to collect service tax from day one  i.e, 01.04.2008and pay to the Govt. If they have failed to do so, they should be advised to pay appropriate service tax along with interest. Regarding CENVAT credit only invoices/bills issued in respect of value of services above the threshold limit of 8 laksh in 2007-08 but received in 2008-09 could be availed by the service receiver and as no service tax has been charged for the amout Rs 5 lakhs billed/charged in 2008-09, no credit could be availed.

Sir, U must be aware that the threshold exemption Limit for the year 2008-09 have been increased from Rs. 8 Lakh to Rs. 10 Lakh .

Sir, a doubt.. Will exemption of 10 lakh be null if a capital good has been received into the premises during the time of exemption.