Exemption available to small service provider
As per Notification no. 33/2012 dt. 20/06/2012 Service tax Act/Rules has provided exemption to small service provider from the whole of the service tax leviable thereon under section 66B of the said Finance Act:
And here Small Service Provider means whose aggregate value of taxable services does not exceed ten lakh rupees in any financial year.
And if the previous year’s value of taxable service provided exceeds Rs. 10 lakh, service tax would be payable even if the current year’s turnover is less than Rs. 10 lakh.
Where the previous year’s turnover is Rs. 10 lakh or below and the current year’s turnover exceeds Rs. 10 lakh, no service tax is payable up to Rs. 10 lakh if the specified conditions are complied with.
Here aggregate value means the sum total of value of taxable services charged in the first consecutive invoices issued during the financial services but does not include value charged in invoices issued towards such services which are exempt from whole of service tax leviable thereon under section 66 B of said financial act under any notification.
Some basic provision related to small service provider:-
- The provider of taxable service has the option not to avail the exemption contained in this notification and pay service tax on the taxable services provided by him and such option, once exercised in a financial year, shall not be withdrawn during the remaining part of such financial year;
- The provider of taxable service shall not avail the CENVAT credit of service tax paid on any input services, and capital goods under rule 3 or rule 13 of the CENVAT Credit Rules, 2004,used for providing the said taxable service, for which exemption from payment of service tax under this notification is availed of,
- Where a taxable service provider provides one or more taxable services from one or more premises, the exemption under this notification shall apply to the aggregate value of all such taxable services and from all such premises and not separately for each premises or each services.
- If taxable services provided by a person under a brand name or trade name , whether registered or not, of another person then that service provider would not be eligible for claiming exemption of small service provider.
- If ownership changes during the year, gross value of taxable services of previous owner, as well as new owner during the year, will be clubbed for calculating the basic exemption limit.
- Clubbing provision will be applicable, if two or more units belong to same proprietor or to same partnership firm or to same private limited company. However, if those units belong to different ownership in such case each unit will be entitled to separate exemption.
- In the case of taxable service where abatement is allowed then it will be the gross amount (before availing abatement) which shell be considered for the purpose of calculation of exemption limit of rs. 10 lakh.