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Service tax exemption limit 10 Lakhs ?

Rajesh Poddar (Chartered Accountant) (321 Points)

05 February 2011

Dear Sir,

One Private limited company just incorporated has done two billings one of Rs. 5 Lakhs and one of 3 lakhs to two different clients. Now this is the only two bills till 31st March. and payments also received.

My query is that on 5 Lakhs the pvt limited company has collected service tax and on Rs. 3 lakhs the service tax is not collected.

Whether they need to register with service tax department, and also whether the private limited company can get the benefit of 10 lakhs in the 1st year.

what about the service tax collected on 5 Lakh bill and on Rs. 3 lakhs service tax not collected ?

Please reply

Rajesh Poddar

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16 Replies

pravin (student) (38 Points)
Replied 05 February 2011

hi Rajesh,

1. As per the Service Tax (Registration of Special Category of Persons) Rules, 2005 when the agg. value of taxable services exceeds 9 lakhs reg is complusory.

2. In the query stated it is only 8 lakhs so reg is not necessay.

3. Yes benefit of 10 lakhs can be availed.

4. In regard of ST collected u can set it off with the CENVAT credit on IP or IPS used to provide the OPS. If still any St to paid to the govt. then reg has to be done with the department.

5. Any assessee who is liable to pay ST should get registration as per ST rule 4.

Thank you

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U S Sharma (glidor@gmail.com) (21063 Points)
Replied 05 February 2011

Originally posted by : Rajesh Poddar

Dear Sir,

One Private limited company just incorporated has done two billings one of Rs. 5 Lakhs and one of 3 lakhs to two different clients. Now this is the only two bills till 31st March. and payments also received.

My query is that on 5 Lakhs the pvt limited company has collected service tax and on Rs. 3 lakhs the service tax is not collected.

- service tax collection without service tax number? advised to return the service tax so collected.

Whether they need to register with service tax department, and also whether the private limited company can get the benefit of 10 lakhs in the 1st year.

- if u want to avail the exemption of 10L then u dont have to charge service tax untill 10 lacs and u have to apply for registration after 9 lacs of service turnover.

- but if u want to not avail exemption then u need to get registration immediately, and charge service tax on all invoices, ( no exemption will be available for the year), input credit of service tax you can avail to set off the liability of output service tax liability.

what about the service tax collected on 5 Lakh bill and on Rs. 3 lakhs service tax not collected ?

- already replied above.

Please reply

Rajesh Poddar

1 Like

Azim Khan ACA,CS,CMA*,LLB* (Proprietor) (1312 Points)
Replied 05 February 2011

Agreed with U S Sharma.

pravin (student) (38 Points)
Replied 06 February 2011

1. Pvt ltd co can avail the benift of 10 lakhs in the first year. Notification is applicable to the assessee automatically. Option is only not to avail the benifit. Therefore exemption is automatic.

2. When there is no liability to collect Service Tax- ST collected should be returned back ( as said above) or should be treated as income.

3. In case the co goes for Reg. ST has to be collected on the 3 Lakhs bill also. hence it is advised to return the ST collected.

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 10 February 2011

Submission of hard copy of documents necessary for granting online registrations

Trade Notice No. 3/ST/2010, dated 11-8-2010

This is to bring to the notice of trade that a large number of online registrations filed are pending issuance in various Ranges/Division offices due to non submission of required documents. It is noticed that while the registration are filled online, either no hard copy of documents is submitted or the documents are submitted after considerable lapse of time. This results in substantial delay in granting registration. In fact, in a very large number of cases (more than 1,000), no documents have been submitted at all.

The list of documents required to be submitted is enumerated in Trade Notice No. 15/ST/2009 available on our above mentioned web site. i.e. www.servicetaxdelhi.gov.in

If the documents are not submitted within 7 days of the filing of online application and/or issuance of this Trade notice, these applications shall be rejected.

it is requested that the trade may give wide publicity to this notice to enable the department to grant speedy registration.

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Sriyam (Business) (21 Points)
Replied 04 August 2011

Dear sir,

We are a Pvt Ltd Company in the field of Manufacturing of Pigments. We have avail service only on freight paid on purchase of Raw Material. The total value of Freight in the f.y. is aprox 5 to 6 lac. Can we avail the Exemption of service tax limit?

Rajesh

Devesh Kumar (Accountants) (21 Points)
Replied 06 December 2011

We want service tax exemption notification no. for service tax exemption limit availing 10 Lakhs.

Pinky Agarwal (Chartered Accountant) (426 Points)
Replied 06 December 2011

Originally posted by : Devesh Kumar
	We want service tax exemption notification no. for service tax exemption limit availing 10 Lakhs.

Original Notification no. 6/2005 dated: 01.03.2005 amended from time to time..

Asad (founder) (21 Points)
Replied 11 March 2012

In case of availing service tax exemption of a business of less than 10laks, I guess we dont need to charge service tax to parties and if yes, is there no need to mention anything about service tax on invoices generated?

hitesh (accountant) (25 Points)
Replied 23 March 2012

dear sir,

please give me service tax rate to all service provider in pdf format-2012 budget.

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Dhruv (Article) (31 Points)
Replied 05 April 2012

Dear Mr. Poddar, The service tax exemption would not be applicable if you are operating under a brand name, trademark etc. (whether registered or not). Please make sure you are registered with the authorities if that is the case. Thanks and regards, CA Dhruv Joshi 09899116128

deepak vedi (manager accounts ) (21 Points)
Replied 12 July 2012

We are Authorised service station of Tata Motors for Commercial vehicles. As per the current law service tax is not applicable on repair of goods carrying vehicles. we would like to know whether the above said exemption on repair of Trucks has been withdrawn and service tax made applicable w.e.f 01.07.2012?. if yes, are we liable to servic tax w.e.f 01.07.2012 or after exausting initial limit of 10 lacs?

Please guide .

Deepak vedi

PRASANTH REDDY (ARTICLE ASSISTANT) (23 Points)
Replied 04 September 2013

i have just started a partnership firm with the object of providing transport of goods service,

,whether 10lakhs exemption of service tax applcable or not, because in service tax there is abatment system for transport of goods system

kshirsagar neha (Accounts and finance department- HOD ) (34 Points)
Replied 16 October 2013

Dear Sir,

We are " Educational Training Institute." ( partnership firm - 2nd year ) we collect affiliation fee and other activities fee related to science projects. If our collection goes above 9.25 L . We are liable to take Registration of Service TAX? ( Last year TO is 7.5L ) Or purchase value is deducted from this collected amount and balance amount is liable to service tax.

Neha