GTA service tax, Service Tax

[frankling g]

For example my turnover is 50 lakhs in a year . Around 40% of items are exempted form service tax( rice, pulses, milk, salt , foodgrains etc...) ie 20laks are exempted . In remaing 30 lakhs 70% is abated .ie 3000000 - 2000000 = 9 lakhs .Now my taxable service is 9 lakhs only. Can I get small scale exemption now ? Please clarify

Posts / Replies

[KASTURI SETHI]

My answer is NO. Pl go through Para 2(viii) of Notification No.33/12-ST dated 20.6.12 as amended. It starts with, "aggregate value of taxable service and not taxable value. Service is taxable but exempted by way of abatement.

[frankling g]

Sethi sir , whether the GTA has to pay service tax for the 9 lakhs?

[KASTURI SETHI]

Dear Sir,

In the example given by you, your figure of ₹ 9 lakhs is incorrect. Out of 50 lakhs, twenty lakhs is fully exempted. From ₹ 30 lakhs, deduct threshold exemption limit of Rs.ten lakhs. From remaining balance of ₹ 20 lakhs, avail abatement of ₹ 14 lakhs (70%). Now ST is to be paid on taxable value of Rs.6 lakhs and not 9 lakhs.

Pl. note that if you have already crossed threshold exemption limit of Rs.ten lakhs in the preceding year, no threshold exemption is admissible this current year.

[Ganeshan Kalyani]

Sir, I agree with the views of Sri Kasturi Sir. In detail reply submitted indeed. Thanks.