The negative list regime has introduced a new Notification No 33/2012 dated 20.06.2012 to provide exemption to the small service providers after superseding the Notification No 6/2005 dated 01.03.2005.
Exemption limit
The taxable service is exempted from service tax if the taxable value does not exceed amount of ₹ 10 lacs in any financial year. However this exemption is subject to certain conditions as listed below.
Conditions
- The taxable services should not be provided in the brand name of any other person.
- The benefit of this exemption limit is not available to the person paying service tax under reverse charge.
- The availment of benefit of exemption under this notification is optional and not mandatory. But once exercised it has to be followed for the remaining financial year.
- The service provider shall not get the CENVAT credit of the input or input services received during the period of availment of exemption notification. Further he shall also not eligible for CENVAT on capital goods received during the period of claiming such exemption.
- The provider of service can take CENVAT Credit on inputs and input services received after on or after the date on which the once he starts paying service tax on the taxable services.
- The provider of taxable service who starts availing exemption under this notification shall be required to pay an amount equivalent to the CENVAT credit taken by him, if any, in respect of such inputs lying in stock or in process on the date on which the provider of taxable service starts availing exemption under this notification and the balance if any will be lapsed.
- For the purpose of calculating limit of ₹ 10 lacs all taxable services shall be considered.
- For the purpose of calculating limit of ₹ 10 lacs value of taxable services form all the premises of the service provider shall be considered.
- The aggregate value of all taxable services, from one or more premises, in the preceding year should not exceed ₹ 10 lacs.
Special provision for GTA
For the purpose of calculating exemption limit of ₹ 10 lacs by GTA the amount on which payment is made under reverse charge shall not be considered.
Aggregate Value
Aggregate value means the sum total of first consecutive invoices issued during the year but does not include the value of services charged for exempted services.
CA Akash Phophalia
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