Ssp eligibility in construction service through tender

This query is : Resolved

PRADEEP MULANI (Querist)
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21 December 2012 Dear Experts,

One person has provided service of commercial construction with materials on the basis of tender for the amount of Rs.5.2 Lac in the financial year 2006-07 in which threshold limit for ssp notification No. 06/2005 was Rs. 4 Lac. Materials of Rs. 3.2 Lac was used in the said services, we apply Notification no. 12/2003 & also issuing CA certificate evidencing the materials used. It means he provided actually service of Rs. 2 Lac.

Query is whether Service provider is eligible for taking benefit of Notification No.06/2005 not required to pay service tax in the year 2006-07 as his service portion does not exceed Rs. 4 Lac? Or he is required to pay service tax on balance amount or Rs 1.2 Lac ( Gross Amount Received Rs.5.2 Less Threshold limit for SSP)?

Awaiting your reply..

Kaushik Vinod

Kaushik Vinod (Expert)
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23 December 2012 Hi Pradeep,

The CG hereby exempts taxable services of aggregate value not exceeding four lakh rupees in any financial year from the whole of the service tax leviable thereon under section 66 of the said Finance Act:

But the above exemption is subject to the following condition :-

The exemption in the Year 2006-07 is available if the aggregate value of taxable services rendered by a provider of taxable service from one or more premises, does not exceed rupees four lacs in the preceding financial year.

Conclusion :-If in the last Fy aggregate value of the taxable turnover is less then 04 lacs the exemption in the CY is available but while calculating the limit of 04 lacs in the last year services given under exemption notification shall also be considered.

Thanks