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TMI BlogSmall Service providers are exempted from payment of service tax up to ₹ 10,00,000/-. Is they are really exempted?X X X X Extracts X X X X X X X X Extracts X X X X ..... Small Service providers are exempted from payment of service tax up to ₹ 10,00,000/-. Is they are really exempted? - By: - SAKTHIVEL PONNUSWAMY - Service Tax - Dated:- 14-4-2015 - - Interestingly in recent past many of the services are pushed under notification 30/2012 dated 26-12-2012 for reverse charge mechanism. By doing so Government is achieving the following:- Collection of revenue is easy One side can announance exemption from service tax up to ₹ 10,00,000/- by saying small service providers and Other side it can collect revenue on the same by inserting the provisions stating that nothing contained in this notification shall apply to, such value of taxable services in respect of which service tax shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid by such person and in such manner as specified under sub-section (2) of section 68 of the said Finance Act read with Service Tax Rules,1994 .Which means payable under reverse charge mechanism. Presently the following are the services covered under both under notification No.33/2012 i.e exempted from service tax up to ₹ 10,00,000/- and taxable under notification No.30/2012 i.e covered under reverse charge mechanism. Sl.No Description of a service Percentage of service tax payable by the person providing service Percentage of service tax payable by any person liable for paying service tax other than the service provider] 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of services provided or agreed to be provided by an insurance agent to any person carrying on insurance business Nil 100% 2 in respect of services provided or agreed to be provided by a recovery agent to a banking company or a financial institution or a non-banking financial company Nil 100% 3 in respect of services provided or agreed to be provided by a mutual fund agent or distributor, to a mutual fund or asset management company Nil 100% 4 in respect of service provided or agreed to be provided by a selling or mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... keting agent of lottery tickets to a lottery distributor or selling agent Nil 100% 5 in respect of services provided or agreed to be provided by a goods transport agency in respect of transportation of goods by road Nil 100% 6 in respect of services provided or agreed to be provided by way of sponsorship Nil 100% 7 in respect of services provided or agreed to be provided by an arbitral tribunal Nil 100% 8 in respect of services provided or agreed to be provided by individua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l advocate or a firm of advocates by way of legal services Nil 100% 9 in respect of services provided or agreed to be provided by a director of a company or a body corporate to the said company or the body corporate] Nil 100% 10 in respect of services provided or agreed to be provided by Government or local authority by way of support services excluding,- (1) renting of immovable property, and (2) services specified in sub-clauses (i), (ii) and (iii) of clause (a) of section 66D of the Finance Act,1994 Nil 100% 11 (a) in respect of serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers on abated value to any person who is not engaged in the similar line of business Nil 100 % 12 in respect of services provided or agreed to be provided by way of supply of manpower for any purpose [ or security services ] Nil 100% 13 in respect of any taxable services provided or agreed to be provided by any person who is located in a non-taxable territory and received by any person located in the taxable territory Nil 100% 14 in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of any service provided or agreed to be provided by a person involving an aggregator in any manner Nil 100% Some of the cases it may happen that both service receiver and service provider are covered under notification 33/2012 , that is both of their turnover are less than ₹ 10,00,000/-. In this case the service receiver has to pay service tax on the service provider service even though his taxable service is less than the exemption limit. In this case small service provider is getting additional burden under this notification instead of getting exemption from payment of service tax. If this is the case how the notification says the small service providers are getting exemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under this notification? Thanks and Regards, SAKTHIVEL PONNUSWAMY M.Com, ACA 68, Green Garden, Avalapalli Road, Hosur, Tamil Nadu - 635109 Mobile: +91-9600242441 Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or recommendation of author. Author never accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon. Readers are advised to consult the professional for understanding and applicability of this newsletter in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without author s written permission. - Reply By LALIT MUNOYAT as = The issue is plain and simple. SSI exemption up to Rs. 10 Lakhs of turnover is available only to service providers and not to service receivers. In case of RCM, the receiver is supposed to pay service tax on full amount of services received without any floor limits. In order to obviate the problems of small service receivers, being business entities, it has been provided that in some such cases no service tax will be payable by the service receiver if his turnover in the preceding year is less than ₹ 10 Lakhs. Dated: 16-4-2015 Reply By SAKTHIVEL PON ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NUSWAMY as = Dear sir, Could you please elaborate your views that it has been provided that in some such cases no service tax will be payable by the service receiver if his turnover in the preceding year is less than ₹ 10 Lakhs ?. I understood that service provider is exempted if his turnover is less than ₹ 10 Lacs. Is Service receiver also exempted? Kindly give your thoughts. Dated: 11-5-2015 - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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