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Threshold limit under service tax???

SANJAY (CHARTERED ACCOUNTANTS) (943 Points)

30 August 2011

Dear Members,
Please tell me how to calculate threshold limit of Rs. 10 Lacs as in last year point of taxation was on recipt basis but this year it was on accrual basis. In last year Service rendered is about to Rs. 6 Lacs and in current year upto Aug month is Rs. 6 Lacs and payment recieved during the year of which services rendered in previous year is Rs. 3 Lacs.
Please clarify soon!! Its urgent!!!

Thanks in advance..
Sanjay Verma

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6 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 31 August 2011

last years turnover would not be counted in calculation of service tax for the year, hence the current year turnover only is to be taken.

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jaganathan (accounts executive) (272 Points)
Replied 31 August 2011

Originally posted by : U S Sharma
	last years turnover would not be counted in calculation of service tax for the year, hence the current year turnover only is to be taken.

agreed..........

SANJAY (CHARTERED ACCOUNTANTS) (943 Points)
Replied 01 September 2011

Here i am not agreed, becouse the law says receipt in current years of which service provided in last year shall be added to compute the threshold limit in current year.. But When threshold limit is crosses then it will apply in all subsequent years...

ajay garg (SR. MANAGER ) (28 Points)
Replied 01 September 2011

Dear

Current year total turn over will be considered or issuance of total invoice or againt invoice, realized amount will be considered.

Regards

Ajay Garg

valji (Accounts manager-MBA) (2150 Points)
Replied 02 September 2011

agreee with mr sharma

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Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 03 September 2011

The exemption is available upto 10 lakhs when the previous year taxable services does not exceed 10 lakhs.

In this case clearly less and therefore available. When the same money is recived there cannot be any tax since it was exempted. Consequentl;y only the services provided and amounts recived upto 1.7.2011 + billing/ completion after that date would be totalled. If this does not exceed Rs. 10 Lakhs there is no liability. Advisable to register when you reach 9 lakhs and start billing the ST once the ST number is allotted.

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