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Eligibility for service tax deduction

Sunil (Business) (46 Points)

28 April 2012

Hello

We are in the business of rendering services in the area of Labour Law Compliances (PF, ESIC & other Labour Laws), Payroll Management & Recruitments since the year Oct 2010.

1) Are we liable to charge ST to our clients in all these 03 areas of operations ?

2) Is there is a time frame or a turnover slab for any business after which it should start charging ST to its clients ?

Thanks in advance for your responses

regards

Sunil

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1 Replies

V K Bajaj (Accountant) (1540 Points)
Replied 02 May 2012

1. The limit for Service Tax is Rs. Ten Lakh i.e. one will start charging service tax as soon as amount of service rendered reaches ten lakh during a year and will pay to Govt. No other criteria.

However, there is a need to apply or get registration for Service Tax on crossing the receipts (or can say turnover) by eight lakhs.

2. Service Tax registration is required for each category of services. Now you see if the service rendered by you falls under two ( recruitment and second payroll services) categories or three.

3. It is not suggested to charge Service Tax from clints without registeration. The amount you will collect as service tax actually belongs to Govt and to whom you will be paying the amount of service tax thus collected from clients.