But in case of service under full reverse charge the same should not be included as the notification soecifically provides for GTA the same principle can be applied to other service undrr full reverse charge and which is the scenario being followed currently by the tax practioners and even department

Dear Ashish

 

Can u please elaborate by solving the example i gave in my first post with your explanations.

 

Thanks

For 14 15 first case small service exemption would be available while in second case small service exemption wont be be available

Dear Ashish

 

Disagree with you.

No SSI exemption in FY 14-15 in respect of any of the services (irrespective of partial or full reverse charge).

 

Regards

We can agree to disagree

Now one question for you an assesse providing manpower supply total turnicer for the year 1314 is rs 6 lacs and 12 13 rs 5 lakhs no other services provided thus small service exemption available to him for 13 14

Hi friends,

 

Please note my view on this matter -

 

The proviso (ii) in the said notification states that –

 

“(ii) such value of taxable services in respect of which service tax shall be paid by such person and in such manner as specified under sub-section (2) of section 68 of the said Finance Act read with Service Tax Rules,1994.”

 

It’s a well-accepted fact that legislature never wastes its words. Meaning, we can understand the following relevant points in this respect –

 

1. Firstly, it does not refer to the value of service on which Service tax is to be paid by a service recipient. Had it been the intention, then it would have been specifically included therein;

 

1. Secondly, it specifically states that such value specified under Section 68(2) of the Act. Meaning, if the service, its value and the person liable to pay is covered under the Notification No.30/2012-ST dated 20 July 2012, as amended from time to time (RCM Notification), then in that case, such value will not be included for the purpose of calculation.

 

1. Thirdly, it also means that services where works contract services (WCT), even though are being specified under the RCM Notification, but if are provided by a body corporate to body corporate, then in that case, the person liable to pay or value would not be covered under the RCM Notification. In other words, this service would be outside the ambit of RCM Notification and accordingly, of Section 68(2) of the Act. Therefore, such service would form the part of aggregate value of taxable services for SSI exemption.

 

I believe the aforesaid explanation in itself makes clear the contentions.

Dear Ashish

 

I know you want me to say YES but my answer is NO.

 

And heres why:

 

The taxable value of services of assessee in FY 12-13 is Rs. 5 lakh which is less than Rs. 10 lakh, he is eligible for SSI exemption in FY 13-14.

 

But now heres the thing:

Assessee taxable value of services is FY 12-13 is less than 10 lakh --------- Agree

Assessee thinks he will get benefit of SSI exemption in FY 13-14 ------------ Agree

Next FY 13-14 comes ------------- Agree

Assessee reads the SSI exemption notification ------------- Agree

Now the first thing he reads is the proviso in which it says sorry mate this exemption notification is not for you because the services for which you wish to claim this exemption in FY 13-14 are covered under reverse charge.

If assessee was providing any other service in FY 13-14 other than on which reverse charge applies, assessee could claim SSI exemption in respect thereof till Rs. 10 lakh in FY 13-14.

 

Regards

Dear Vikas

 

1) Regarding your point (a) i disagree

 

Section 68(2) is all about fixing the service tax liability on such person specified by notification.

 

Section 68(2) doesnt say who this person will be but notifcation 30/2012 tells us that this person is service recipient.

 

So it is specifically mentiones in law but you are saying the opposite.

 

Proviso to section 68(2) talks about partial reverse charge.

 

When proviso to SSI notification says that this notification doesnt apply to reverse charge services as defined in section 68(2) then we have to read section 68(2) in totality including the proviso to section 68(2) which means both full and partial reverse charge is covered.

 

2) Regarding your point B i disagree. and all the debate on this thread thus far has been on this point for which my views are there for everyone to read.

 

3) Regarding your point C i agree.

But disagreement is that you are including this from calculating the taxable value of services only when it fails to meet the reverse charge conditions specified in 30/2012 notification but my views are clear that while calculating the taxable value of services reverse charge services also has to be included since they are also taxable services provided by service provider.

only in respect of GTA it is not to be included and notification specifically mentions it in point 3.

 

 

regards

 

I completely dis agree with yiu shivani because I am claiming sse fir my client frim last two years and have got no demand notice further the proviso has been copied word by word from the erstwhile notification when there was no provision for partial reverde charge an thus the proviso was to exclude benefit of sse to service reciver however with the introduction of partiap reverse charge tge proviso has ironically has not been changed

Further the yee of the word such clearly refers to service reciever as ex0lained by me above

Agree to disagree

i posted this query on experts forum also but none of the experts took up my query thus far

THE SSP expemtion is for service provider . He will get exemption only in respect of which he provides the service. If the service is under reverse charge, the reverse charge sevice will be fully taxable.Same goes for PRC. The partial reverse charge value is not eligible for exemption. 
However in case the service receiver is a service provider also in respect of other service, in such a case he will be eligible for expemtion only in respect of service provided by him. ( Not the reverse charge service)

Mr. Sanjay is providing two taxable services, Service A and Service B.   The value of taxable service A during the FY 13-14 is Rs. 600000.   The value of taxable service B during the FY 13-14 is Rs. 500000.   Taxable service B is taxable on full reverse charge basis where the service receiver is liable to pay service tax (100%).   Is Mr. Sanjay eligible for Small Service Provider Exemption as per Notification No. 33/2012 in the FY 14-15? What will be your answer if taxable service B was taxable on partial reverse charge basis, say share of service provider and service receiver both being 50%.  

IN YOUR QUERY ,
sanjay is eligible for SSP expemtion in respect of service A only. Service B which is a rc service will be fully taxable.

case 2 ( PRC)- Service A fully exempt ( SSP) & service B which is partail reverse charge service is also exempt. 600000+ 250000 (50% value) = 850000 which is < 10 lacs limit.
SR will pay tax on 250000 value of service B.