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Service tax exemption limit criteria

Saurabh (CA ) (55 Points)

04 March 2016

Good Morning to all the Members;

I have the following basic query related to Service Tax:

1) Right Now there is a Exemption Limit of Rs. 10 Lac, to Charge Service tax for the new user. My Query is: If the the New User has taken the Service tax Number from the department, and it taxable turnover during the Financial year doesn't Cross the Limit of Rs. 10,00,000. so he need to pay the service tax ?

And Wether he need to charge Service Tax on his billing if his taxable turnover doesn't cross of Rs. 10,00,000..?

please guide and suggest me, how to go ahead related to above issue?

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9 Replies

CMA Poornima Madhava (CMA) (13112 Points)
Replied 04 March 2016

Though you are voluntarily registered, there is no need to charge ST till you cross the limit of Rs.10 lacs (in the CY or PY)
But you need to file nil returns

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Saurabh (CA ) (55 Points)
Replied 04 March 2016

Thank You Poonam Madam.

for the Next Financial Year the Limit of Rs 10,00,000 is started from Zero Again or it is Cummulative of Previous year.?

CMA Poornima Madhava (CMA) (13112 Points)
Replied 04 March 2016

My name is not poonam :) Limit is not cumulative and it is applicable separately for each FY

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Saurabh (CA ) (55 Points)
Replied 04 March 2016

Sorry Poornima Maam.

Thanks for your Prompt Reply..

jogendra (DGM-Commercial) (331 Points)
Replied 04 March 2016

you need to file return declaration value exempted under notification No.33/2012-ST

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Ranganathan (student) (104 Points)
Replied 05 March 2016

If Threshold limit not exceeds in preceeding previous year then ST has to be paid only on over and above the limit i.e. 10 lacs in current year. If limit exceeds in proceeding previous year then ST has to be paid on the whole amount in the current year even if it not exceeds 10 lacs in CY. For an new assesse there is no turnover in proceeding previous year so ST has to be paid over and above 10 lacs. Hope this helps.

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CS AVINAV SHARMA (A.M (COMPANY SECRETARY) AT MINDARIKA) (45 Points)
Replied 05 March 2016

Yes, Mr. Ranganathan...nice reply..

Ashok J (CA Final) (880 Points)
Replied 05 March 2016

Dir rem is covered under rcm....does it mean co must pay st on every re of rem without any treshold limit??

Ruchi (CA) (1410 Points)
Replied 05 March 2016

Yes, if the director -company relation doesn't satisfy the employee-employer criterion then any remuneration paid to director attracts service tax under rcm and since there is no threshold limit specified then company must pay ST on every Re expended.