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Service tax-urgent exam query

Udhins (Chartered Accountant) (113 Points)

20 October 2009

Provisions say that for servicetax providers if their total income does not exceed 10lakhs then they are exempted from service tax! Then what happens to the amount collected by service providers from the consumers ! If they do not remit it to govt then does it come into taxability of Income tax?

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4 Replies

(Guest)

hello frnds

dont get confused with the rules.If u have collected any amount from your client in the name of service tax then you have to deposit to the government it does not matter whether u r small service provider.

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CA.Tarun Maheshwari (CA, DISA) (7150 Points)
Replied 20 October 2009

Yes, I agree. And dont mix up service tax with Income tax. Both are different and no relation with each other. You have to apply for service tax immediately and pay service tax to the Govt.

(Guest)

Originally posted by :CA.Tarun Maheshwari
"	Yes, I agree. And dont mix up service tax with Income tax. Both are different and no relation with each other. You have to apply for service tax immediately and pay service tax to the Govt.	"

Abhishek Agarwal (Student) (56 Points)
Replied 13 November 2009

First Year Of providing service

Don't Collect Service Tax till Your Aggregate Value of Service crosses 10,00,000

After that Start Collecting Service Tax becoz

Liability of Service Tax = 10.3 % ( Aggregate Value - 10,00,000) {if entity is entitled for service tax exemption}

Entitlement of Service Tax Exemtion-:

1.) Preceeding Year Aggregate Value of Service Tax <or = 10,00,000 (irrespective of whether service tax paid in preceeding year or not)

First Year ka case to clear hai ab subsequent year's ka samjho

In subsequent Years

if Aggregate Value of Service provided in preceeding year is less than 10,00,000(irrespective of the fact whether service tax paid in preceeding year or not)

you are entitled for exemption limit

So dont collect service tax on Aggregate Value of Service10,00,000

After that start collecting service tax

But practically subsequent years mein aisa hota nai becoz subsequent years mein receipts increase for any organisation