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Threshold limit for service tax

Pawan Mittal (CA Final) (702 Points)

26 August 2012

Suppose a company earns Rs. 12 lacs in Financial Year 2011-12, will it have to pay service tax on Rs. 12 lakh or Rs. 12-10= 2 lakh and in F.Y. 2012-13, company earns Rs. 15 lacs. What is the service tax treatment for both the years?

Please give section no. or notification no.

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10 Replies

CA. Praveen Kumar P (CA & CS) (113 Points)
Replied 26 August 2012

Service tax is to be paid on 2 & 5 lake respectively for each year

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 26 August 2012

for 1st year 12-10= 2 lacs taxable

for 2nd year 15 -0 = 15 lacs taxable

Nitin Katariya (Article) (94 Points)
Replied 26 August 2012

In first year taxable amt= 2 lacs. but from second year onwards you have to charge sevice tax on total amount of Rs. 15 lacs.

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 26 August 2012

Yes. First year 2 lacs, and for the next year the exemption is not available. You have to collect and pay the tax for 15 lacs turnover.

Pawan Mittal (CA Final) (702 Points)
Replied 26 August 2012

and if the company earns income of Rs. 5 lakhs in the third year what will happen than?

ANAND S (student) (162 Points)
Replied 27 August 2012

The said 10 lac exemption we can claim at once when turnover exceed 10lac they are not small service provider and from next year onwards they need to charge even their turnover is 1rs. so third year if 5lac then taxable amt is 5 lac

MAHADEV WAGHAMODE (SR. ACCOUNTS OFFICER) (21 Points)
Replied 27 August 2012

Sir one question there is reverse charges mechanism system

for example supply of man power 25% and 75% ie 3.09% and 9.27% where 3.09% is shown as service tax receivable but what about 9.27% how it can be shown as accounting entry?

ACMA Obulirajan R (M.Com, ACMA) (1119 Points)
Replied 27 August 2012

@ Pawan

1st year 12-10 = 2 lacs on this service tax to be paid

2nd year service tax to be paid on full tot i.e. 15 lacs

DHDHDHDHDH (DHDHDHDHDH) (32 Points)
Replied 27 August 2012

Dear Mr. PAwan,

First Year Rs. 2 lacs is taxable. Next year onwards full amount is chargeable to Service tax evein if it is only ₹ 1.

Show 75% service tax as your payable amount and your receivable amount as well It is your liability to pay 75% in cash to government & you simultaneously you can take the credit of the said amount. So this 75% is Payable as well as receivable for you.

vikash rathi (Chartered Accountant) (787 Points)
Replied 29 August 2012

Originally posted by : RENGARAJ R.K
	Yes. First year 2 lacs, and for the next year the exemption is not available. You have to collect and pay the tax for 15 lacs turnover.