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Service Tax queries

Kiran Joshi (Artilcled Assistant) (34 Points)

02 January 2010

Dear all

One assesse is having service tax number from 2005. He provides taxable services till 2008 and payes service tax in time. Now from 1 st April 2008, taxable service does not exceed the limit of RS 10.00 lacs also he has not collected and paid service tax on respective sales.

So whether he should collect tax even if hi turnover of taxable service does not exceed the limit.

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5 Replies

CA CS Akashdeep Singh (Practicing CA) (1394 Points)
Replied 02 January 2010

If you provide the taxable service during previous year of amount less than Rs. 10,00,000/-, then during current year your current receipts of Rs. 10,00,000/- is exempt.

If you charged and receive service tax from your client, then it is compulsory to pay such tax to the department.

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Kiran Joshi (Artilcled Assistant) (34 Points)
Replied 02 January 2010

Dear Akashdeep

Is there any circuler or notification regerding the same?

EKALABYA TALUKDAR (SERVICE TAX CONSULTANT) (666 Points)
Replied 02 January 2010

SERVICE PROVIDER CAN NOT ACCESS IN ADVANCE THAT THE SERVICE WILL BE WITHIN THE LIMIT OF 10 lAKH, AND FORGO TO COLLECT SERVICE TAX.

IF THE SERVICE PROVIDER IS SO CONFIRM, BETTER TO SURRENDER THE SERVICE TAX REGISTRATION NUMBER AND ACT ACCORDINGLY

Amir (Learner) (4016 Points)
Replied 02 January 2010

Dear Kiran,

Akshadeep is right and the relevant provision is written in Sec 73 A of the Finance Act , 1994, reproduced as below:-

(1) Any person who is liable to pay service tax under the provisions of this Chapter or the rules made thereunder, and has collected any amount in excess of the service tax assessed or determined and paid on any taxable service under the provisions of this Chapter or the rules made thereunder from the recipient of taxable service in any manner as representing service tax, shall forthwith pay the amount so collected to the credit of the Central Government.

(2) Where any person who has collected any amount, which is not required to be collected, from any other person, in any manner as representing service tax, such person shall forthwith pay the amount so collected to the credit of the Central Government.

(3) Where any amount is required to be paid to the credit of the Central Government under sub-section (1) or sub-section (2) and the same has not been so paid, the Central Excise Officer shall serve, on the person liable to pay such amount, a notice requiring him to show cause why the said amount, as specified in the notice, should not be paid by him to the credit of the Central Government.

(4) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom the notice is served under sub-section (3), determine the amount due from such person, not being in excess of the amount specified in the notice, and thereupon such person shall pay the amount so determined.

(5) The amount paid to the credit of the Central Government under sub-section (1) or subsection (2) or sub-section (4), shall be adjusted against the service tax payable by the person on finalisation of assessment or any other proceeding for determination of service tax relating to the taxable service referred to in sub-section (1).

(6) Where any surplus amount is left after the adjustment under sub-section (5), such amount shall either be credited to the Consumer Welfare Fund referred to in section 12C of the Central Excise Act, 1944 or, as the case may be, refunded to the person who has borne the incidence of such amount, in accordance with the provisions of section 11B of the said Act and such person may make an application under that section in such cases within six months from the date of the public notice to be issued by the Central Excise Officer for the refund of such surplus amount

sanjeev singh (articles) (50 Points)
Replied 04 January 2010

Dear Kiran, In service tax an exemption under notification no. 6/2005, is available to small scale service provider in which a service provider is not liable to pay service tax on the first receipt of rs. 10 lacs. if the value of services rendered by him during the previous year does not exceed rs. 10 lacs. But he has the option not to avail this exemption and pay the service tax and such option if once adopted, can not be withdrawn during the previous year in which it is adopted. but in the next year he can avail the exemption if the value of service rendered during the previous year does not exceed rs. 10 lacs. So you can avail the exemption so well if the value of services rendered during the previous year does not exceed rs. 10 lacs. if you have collected tax on some sales then to avails this exemption he should refund such tax to the respective client. but if tax has been deposited with department then such exemption can not be availed