Exemption limit of service tax

This query is : Resolved

PANDIT (Querist)
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02 May 2012 If any Person Cover under Exemption Limit Of Rs. 10 lacs In service Tax Act. If They will collect the service Tax amount,then he will liable to pay service tax.

Ki$hor B

Ki$hor B (Expert)
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03 May 2012 your Q needs to be more clear.

I assume you want to know whether ST is applicable on the receipts exceeding the 10L limit or on the whole of services rendered.

In the FY when you cross the 10L limit (for the 1st time in your business) ST is to be collected only on the services exceeding 10L.

In the subsequent years ST HAS to be collected on all services rendered.

CA Nikhil Jhanwar

CA Nikhil Jhanwar (Expert)
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03 May 2012 As I understand your query is whether service tax collected which was not supposed to be collected has to be paid to Government. The answer is Yes as per Service Tax RUles, 1994. IF any servic tax is collected wrongly then it has to be paid to government account because you are not audthorised to withold money which your cannot collect.

But you will not required to pay such amount to Government if your have refunded it to the service receiver from which it is collected.