Threshold limit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 August 2011 Dear Experts,
Please tell me how to calculate threshold limit of Rs.10 Lacs as in last year point of taxation was on recipt basis but this year it was on accrual basis. In last year Service rendered is about to Rs.6 Lacs and in current year upto Aug month is Rs.6 Lacs and payment recieved during the year of which services rendered in previous year is Rs.3 Lacs.
Please clarify soon!! Its urgent!!!

Thanks in advance..
Sanjay Verma

CA. Nitin Agrawal

CA. Nitin Agrawal (Expert)
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30 August 2011 Dear Mr. Anonymous

Since you are following accrual basis of accounting in the current year,hence:

1. Income which you earned this year &
2. Income which you earned last year but
recpt. this year.

both will be taxable.

I think your concern is mainly for the income of previous year which is accrued last year but receipt during this year. In these case, what ever method you follow will going to be taxed in this year itself because this income was not taxed in previous year.

hope the query is clear now

now cheers

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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31 August 2011 The threshold level of service tax exemption for small service providers is Rs. 10 lakhs,
provided that the aggregate value of taxable services RENDERED by such provider of taxable
service from one or more premises, does not exceed Rs. 10 lakh in the preceding financial year.
Last year, total amount of services rendered is Rs. 6 lakhs. No service tax in last year.
This year, services rendered is Rs. 6 lakhs and receipt against last year services is Rs. 3 lakhs thus aggregating to Rs. 9 lakhs which is also exempted from ST being less than the threshold limit of Rs. 10 lakhs. When the aggregate of services rendered in current year and payment received against last year services exceed Rs. 10 lakhs in curent year, ST has to be paid in current year in excess of the said Rs. 10 lakhs.

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Querist : Anonymous

Querist : Anonymous (Querist)

31 August 2011 Sir, upto turnover of Rs.10 Lacs is Exempted. My question is that when the turnover is exceeded to 10 Lacs then service tax is payable over and above of Rs.10 Lacs or on whole amount of turnover.
Please reply soon.?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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31 August 2011 As and when the aggregate of services rendered in current year and payment received against last year services exceed Rs. 10 lakhs in curent year, ST has to be paid in current year in excess of the said Rs. 10 lakhs.

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Querist : Anonymous

Querist : Anonymous (Querist)

31 August 2011 Thankx a lot sir...