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Srevice tax calculation

edida raja (proprietor) (24 Points)

11 May 2012

I get a monthly rental income (Commercial) of Rs.1,00,000/- per month . So my annual gross income is Rs.12,00,000/-.

The service tax is to be calculated on gross income (12,00,000) minus exempted (10,00,000) = 2,00,000/- . so the service

@ 12.3% is 24,6000 . Is this way service tax be calculated

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4 Replies

Arun Kumar Singh (GST Advocate) (15220 Points)
Replied 11 May 2012

Exemption for small scale service provider whose aggregate value of clearances does not exceed Rs. 10 lakhs in the financial year. You will pay service tax on value of Rs. 2 lakhs.

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Pinky Agarwal (Chartered Accountant) (426 Points)
Replied 11 May 2012

Originally posted by : edida raja
	I get a monthly rental income (Commercial) of Rs.1,00,000/- per month . So my annual gross income is Rs.12,00,000/-. The service tax is to be calculated on gross income (12,00,000) minus exempted (10,00,000) = 2,00,000/- . so the service @ 12.3% is 24,6000 . Is this way service tax be calculated

Dear Sir,

You are required to charge service tax in your invoice after your income cross Rs.1000000.

In the given case from the 11th month you are required to chrge service tax @ 12.36%, the amount of service tax which you have received from your client is required to be deposited to the Govt.

However, as per POT rules, point of taxation will be earlier of the two:

(1) Date of invoice or,

(2) Date of payment

Therefore even if you have not received payment from your client bt bill has been raised by you then in this case you need to pay service tax to the govt within due date.

Regards,

Pinky Agarwal..

CA Ketan Waghela (Partner at Elite Educare) (356 Points)
Replied 13 May 2012

Agree with Ms. Pinky Agrawal,

The limit of Rs.10,00,000/- can be availed once (subject to a condition it can be availed again). So from the next year Edida Raja ji, you need to charge service Tax from the first month and not from the 11th month.