B1.1 and b1.9 for one time 10l service tax exemption

We will be claiming the one-time exemption of Rs.10 lakhs on my brother's rental income as per notification 33/2012 (earlier 06/2005) and accordingly we have started collecting Service Tax on rent only after Rs.10 lakhs in F.Y. 2012-13. But now that we are filing the first Service Tax Return for July to September 2012 (April to June no service tax was collected as Rent had not crossed Rs.10 Lakhs) and we had some questions about what values to fill in the form.

Since we had filed for Service Tax Registration in July 2012 and then started collecting Service Tax from the Tenant from August 2012, what should be the amount I should enter for field B1.1 Gross Amount and B1.9 for the Exemption amount?

Option 1: If Rent from April to September 2012 of 12 lakhs is shown in field B1.1 for Gross Amount then Exemption of 10 lakhs can be shown in field B1.9 and then taxable value is correctly shown as 2 Lakhs and we have collected Service Tax on the same and paid the same.

Option 2: But technically, value for both fields should be for the period from July to September 2012 only. So if I enter 4 lakhs in B1.1 Gross Amount and 2 lakhs for B1.9 Exemption, then taxable value will be 2 lakhs. But if we do that then that may be misleading as how do I show the previous quarter's rent and exemption?

I wonder if someone is going to say that we should have filed a separate return for April to June 2012 for Gross Amount and then full amount as Exemption for that quarter? But then we did not even apply and have a registration number until July/August 2012. Why should we file a return for April to June 2012?

Had it been a half-yearly return like earlier, then this complication would not have arisen. But now this complex dilemma due to Quarterly returns. Still, even with half-yearly returns if someone's taxable service income exceeded 9/10 lakhs only in the second half of the year, then they too would have faced the same issue about how to show the Gross Amount and Exemption.

We feel Option 1 is practical but we wanted to check Expert opinion about what others were doing, what's the best practice?

Thanks in advance for your time!

p.s.: I guess not many Experts are visiting the 'Forms' sub-forum-category within Service Tax Forum and so I am posting in this main Service Tax Category (instead of that discrete and infrequently visited sub-forum).

A related question... since we had filed for Service Tax Registration in July 2012 and then started collecting Service Tax from the Tenant from August 2012, what should be the amount I should enter for field B1.1 Gross Amount and B1.9 for the Exemption amount? Option 1: If Rent from April to September 2012 of 12 lakhs is shown in field B1.1 for Gross Amount then Exemption of 10 lakhs can be shown in field B1.9 and then taxable value is correctly shown as 2 Lakhs and we have collected Service Tax on the same and paid the same. Option 2: But technically, value for both fields should be for the period from July to September 2012 only. So if I enter 4 lakhs in B1.1 Gross Amount and 2 lakhs for B1.9 Exemption, then taxable value will be 2 lakhs. But if we do that then that may be misleading as how do I show the previous quarter's rent and exemption? I wonder if someone is going to say that we should have filed a separate return for April to June 2012 for Gross Amount and then full amount as Exemption for that quarter? But then we did not even apply and have a registration number until July/August 2012. Why should we file a return for April to June 2012? Had it been a half-yearly return like earlier, then this complication would not have arisen. But now this complex dilema due to Quarterly returns. Still, even with half-yearly returns if someone's taxable service income exceeded 9/10 lakhs only in the second half of the year, then they too would have faced the same issue about how to show the Gross Amount and Exemption. We feel Option 1 is practical but we wanted to check Expert opinion about what others were doing, what's the best practice? Thanks in advance for your time!

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