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Service Tax Exemption

Gourav Goyal (Industrial Trainee) (230 Points)

20 February 2009

My question is that whether i am liable to pay service tax on the retainer ship received for the month of April 08 in the FY 08-09.

Is it valid ground for not to pay service tax that my retainership fee does not exceed Rs.10Lakhs ?

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S. Banerjee (Practising Cost Accountant. Core area- Central Excise. Service Tax Costing system installation including maintenance of Cost Records and Cost Audit and Management Audit mainly Revenue leakages Audit) (622 Points)
Replied 20 February 2009

Originally posted by :Gourav Goyal

Question;- suppose i am a retainer and i am providing my services to a company from the FY 07-08, in the FY 07-08 i was liable to pay service tax to the govt. as my retainership fee was exceeding the taxable limit. In the FY 08-09 , i just provide my services only for a month i.e. April 08 and my retainership does not exceed taxable limit i.e. 10 lakhs and i have surrendered my certificate to the Govt in the month of July 08 .
My question is that whether i am liable to pay service tax on the retainer ship received for the month of April 08 in the FY 08-09.
Is it valid ground for not to pay service tax that my retainership fee does not exceed Rs.10Lakhs ?

If you have charged Service Tax in your bill for the month of April 2008 and realised the same by June 2008 accordingly, the Service tax due as on 30th June 2008 and same is to be paid by 5th July 2008 in case of it is propreitorship firm or partnership firm.

Thanks,

S. Banerjee

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Originally posted by :Gourav Goyal
"	Question;- suppose i am a retainer and i am providing my services to a company from the FY 07-08, in the FY 07-08 i was liable to pay service tax to the govt. as my retainership fee was exceeding the taxable limit. In the FY 08-09 , i just provide my services only for a month i.e. April 08 and my retainership does not exceed taxable limit i.e. 10 lakhs and i have surrendered my certificate to the Govt in the month of July 08 . My question is that whether i am liable to pay service tax on the retainer ship received for the month of April 08 in the FY 08-09. Is it valid ground for not to pay service tax that my retainership fee does not exceed Rs.10Lakhs ?	"

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 20 February 2009

If you have charged service tax, then irrespective of your liability to pay, you are required to pay.

Otherwise also you are required to pay. A small service provider is the person whose value of services in preceding year is less than exemption limit. In your case, your services value has been more than the exemption limit in the preseding year, hence you are liable to pay the service tax without any exemption.

CA CS Akashdeep Singh (Practicing CA) (1394 Points)
Replied 21 February 2009

Yes, i agree with Mr. rajesh Kumar.

and exemption limit which is required to be considered for previous year is Rs. 10,00,000/-

If you satisfy such exemption limit then, service tax is exempt upto receipts of Rs. 10,00,000/- in current year.

In such case, you will not charge service tax in invoices upto Rs. 10,00,000/-

Ravinder (CA) (39 Points)
Replied 14 May 2009

Originally posted by :Rajesh Kumar

Tell me one thing : if last year my consultancy fees was Rs. 100000 only and i had paid service tax on that. but in current year my receipts is Rs. 12 lakh. Can i get the exemption upto Rs. 10 lakh in current year.(i am not charging any service tax in bills). and what about the input credit.

If you have charged service tax, then irrespective of your liability to pay, you are required to pay.
Otherwise also you are required to pay. A small service provider is the person whose value of services in preceding year is less than exemption limit. In your case, your services value has been more than the exemption limit in the preseding year, hence you are liable to pay the service tax without any exemption.

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Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 14 May 2009

You are required to pay ST on 12 Lakhs.

However since you have not charged the ST of 12.36% = 1,48,320/- to your clients the amount you recived is includive of ST.

Therefore liability wouldbe 12/1.1236 x 12.36% = Rs.1,32,005/-

Ravinder (CA) (39 Points)
Replied 14 May 2009

Originally posted by :Madhukar N Hiregange

in preceding year my receipts was less than rs. 10 lakh , then why i will not get the SSP exemption from Rs. 12 Lakh

You are required to pay ST on 12 Lakhs.
However since you have not charged the ST of 12.36% = 1,48,320/- to your clients the amount you recived is includive of ST.
Therefore liability wouldbe 12/1.1236 x 12.36% = Rs.1,32,005/-

Satish (CA Final Student) (479 Points)
Replied 16 May 2009

Apart from all the views, you need to hold service tax registration for the whole year even if you don't render service as your previous year's receipts already exceeded 9 lacs