Dear all,
I want to know:
If service provider had provided the service of Rs. 6,00,000/- in 2004-2005, but the realisation of profession fee was only Rs. 2,00,000/-. [i][u](there was no possibility of remaining amount could be realized[/i][/u])
From 1-5-2005, when exemption of Rs. 4,00,000/- came, is this service provider is eligible to get the exemption for year 2005-2006?
The notification says that "[u][i]the aggregate amount means that the total amount received after first consecutive payment during the previous financial year[/i] [/u]". If this falls within Rs. 4,00,000/-, I think the service provider is automatically get eligible for exemption, please put your valued opinion on the issue..
The One Says:
The Value of taxable services is the amount CHARGED .... I don't see the amount received being the criterion .... this is my opinion ..... others are welcome to add theirs. (the amount charged being Rs. 600000 in this case the person is not a small service provider, the service tax should be paid on Rs. 200000). The following extract should provide you with some information:
To be eligible, it should be satisfied that aggregate value of all taxable services rendered by a service provider from one or more premises does not exceed Rs 4 lakh in previous financial year. Aggregate value of Rs 4 lakh means sum total of first consecutive payments received during financial year towards the value of taxable services rendered till the amount equals Rs 4 lakh. Payment received towards exempted services will not be considered for reaching this limit. Preceding financial year's taxable services will be considered for eligibility.
The exemption is related to first payments received in a financial year irrespective of the actual date of provisions of services. Assessees will have to take note of two important conditions for enjoying the exemption meant for small service providers.
In Notification No. 06/2005-ST dated March 1, 2005, clause 2(viii) states that to be eligible for exemption, [b]the aggregate value of taxable service [/b]from one or more premises should not exceed Rs 4 lakh in the preceding financial year. Service tax will be payable only on the amounts over and above Rs 4 lakh, that is, the first Rs 4 lakh shall be exempt from service tax.
In the next year, if the preceding year's turnover exceeded the threshold limit, the exemption cannot be used even if the value of services is less than Rs 4 lakh in that year because the eligibility has to be recovered with respect to previous year.
Hope it helps.
CAclubindia
