St when gross income less than 10 lakhs

1) Service Tax is not paid on income, but on Gross receipts / Billing of taxable services

2) all taxable services would be compunded for the purpose. 

if gross receipt of business is below 10 lacs in FY 14-15 then meet your superintendent and submit the facts, on verification he can guide you better 

Service providers whose taxable services in the PY is <=10 lacs are SSPs in the CY. So if previous year turnover has not exceeded the limit, then there is no need to charge ST in the current year till u reach the exemption limit. However, u will have to file nil ST3 return during the current year. There is no need to surrender the registration.