Service tax

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Praveen Sharma (Querist)
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10 December 2012 Hi

We have a LLP registered in August 2012. We provided service in education field and received a payment of 16 lacs. As this is our first year for the service tax payment, do we have to pay the service tax on the complete amount or do we have to pay the service tax on the amount exceeding 10lacs?

@VaibhavJ

@VaibhavJ (Expert)
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10 December 2012 Hi

You have to pay ST on amount exceeding 10 lacs.

Thanks//vaibhav

Praveen Sharma

Praveen Sharma (Querist)
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10 December 2012 Thanks for the reply sir.

R u sure we have to pay the service tax on amount exceeding 10 lacs as I had a discussion with a CA over the phone and he told us dat the service tax has to be paid on the complete amount

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Praveen Sharma

Praveen Sharma (Querist)
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@VaibhavJ

@VaibhavJ (Expert)
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10 December 2012 Hi

Even if the service provider crosses turnover of specified limit in current year, he will be liable to service tax only on turnover exceeding the specified limits and not on his earlier turnover, so long as his taxable turnvoer during the previous year was less than specified limit.

However, if taxable turnvoer in current year exceeds the specified limit, there will be no exemption from service tax in the next Financial year. What is relevant is turnover of the previous year only .

For example: if the value of taxable service was Rs. 8 lacs in the F.Y 2011-12, the person can avail exemption in 2012-13. Suppose his turnover of taxable servies was Rs. 12 lacs in 2012-13, he will be liable to pay service tax on Rs. 2 lacs in 2012-13.

Next year ie, in 2013-14 he will not be eligible for any exemption and will have to pay service from 01/04/2013 even though taxable service is less than 10 lacs.

Suppose his turnover for the year 2013-14 comes down to 7 lacs, then in 2014-15 he can avail exemption up to First 10 lacs.

Thanks//Vaibhav
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Praveen Sharma

Praveen Sharma (Querist)
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10 December 2012 thx a ton for the information sir.