Small scale service provider

This query is : Resolved

Himansu (Querist)
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19 April 2011 my clints taxable service crossed Rs 10 lacs marks. Can any one suggest whether my clint has to pay service tax on whole amount or only on that amount that crossed rs 10 lacs limit.

Suresh Ramaswamy

Suresh Ramaswamy (Expert)
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20 April 2011 As per the provisions of the Finance Act, 1994 (service tax act), as amended from time to time, an assessee is required to register himself once his taxable turnover exceeds Rs.9 lacs. He has also to file a declaration with the Service Tax Authorities that he is availing of the exemption notification. When his turnover first crosses Rs.10 lacs, the assessee will have to recover the service tax only on the turnover exceeding Rs.10 lacs e.g if the turnover is Rs.12 lacs, then the service tax liability is only Rs.20,600/- i.e. on the excess over Rs.10 lacs.

Please note that this is a one time exemption. In the subsequent financial year the liability to collect and remit service tax occurs from the very first rupee.