Nishtha Narielwala (Tax Consultant) (131 Points)
30 October 2012How to avail the basic exemprtion of Rs.10Lacs in the following case:
Mr. A has provided services including cost of materials of Rs. 15 Lacs, & has opted to pay Service Tax @ 10.30% on 33% of gross amount charged. Which of the two methods is correct -
a) Rs.15Lacs Less Rs.10Lacs (basic exemption) = 5Lacs * 33% = 1.65Lacs * 10.30% (ST) = Rs.16,995
or
b) Rs.15Lacs * 33% and then take the basic exemption if possible.
Kindly reply which is the appropriate way to avail the basic exemption?
Arun Kumar Singh
(GST Advocate)
(15220 Points)
Replied 30 October 2012
You will pay the service tax after exemption limit i.e. Rs. 5 lakhs.
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 30 October 2012
Experts are divided on this question and there is no judicial view to support. I am of the view that the basic exemption is on value before abatement.
CAclubindia
