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Service Tax

Nirmal (Partner) (32 Points)

07 February 2010

Hi,
When should a company / individual pay service tax. The company has made only 5 lakhs turnover for the financial year 2009-2010.

However, we forsee that the recipts would cross 12 lakhs for financial year 2010 - 2011. Is it advisable to quote service tax from the clients on all invoices from April 2011?

Also let me know, what happens is we manage to make a turnover below eligibility requested by the department and in such case, we have already started collecting the service tax amount?

Please guide

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2 Replies

Amir (Learner) (4016 Points)
Replied 08 February 2010

Dear Nirmal,

If at present ur annual receipts are below Rs. 10 lacs then nothing is required in this Financial Year..

Now next year u said that u belive that turnover would cross RS. 10 Lacs, Service tax shall be payable onlyin respect of turnovern in excess of Rs. 10 Lacs.. (i:Say ur turnover is Rs. 12 Lacs , then Service tax is payable only on Rs. 2 Lacs)

From year next to the above, even if ur annual turnover is less then Rs. 10 Lacs u have to pay service tax on the entire receipts..(i:e If ur receipts are Rs. 5Lacs or Rs. 15 Lacs, u have to pay service tax on Rs. 5 Lacs/Rs15 Lacs)

If u were not require to collect service tax & u have collected it then u have to deposit that amount with the govt. otherwise interest & penalities will apply........