03 November 2008
I am a proprietorship firm with current billing below 10L rupees (around 8L current billing). I have to raise an invoice for services for Rs. 2.5 (single bill). I want to know-
1. Should I apply for service tax registration now or after billing this amount which will take me above 10L? 2. On what amount will service tax have to be charged and paid? On entire 2.5L or only on the excess over 10L, i.e. on Rs. 50,000 only?
Is their some specific rule on item 2 above?
Your help and clarification is deeply appreciated.
03 November 2008
1)Registration is compulsory on reaching Rs 9 lakhs for the financial year. 2)Service tax to be paid on turnover immediately on crossing, only on amount in excess of Rs 10 lakhs for the first year. From second year onwards on the 1st rupee onwards.
I had also called the Service Tax Helpline and they said the tax has to be charged on total invoice value which makes the billing cross 10L? I am bit confused now. How should I make the invoice to avoid complications? Alternatively I can just charge my customer - collect and pay the tax to government.
03 November 2008
If a single bill make you cross from less than Rs 10 lakhs to more than 10 lakhs, you have to charge the Service tax on the entire bill amount as the service is non divisible in this case.
04 November 2008
You have to levy the tax on bill value i.e 2.5L ,
The 10L limit only for qualifying amount for reaching the limit of 10L it is nothing to do with your bill to client once the you hv taken the registration then you require to charge the S.T on bill amount
CAclubindia
