Having Turnover of Less than 10 Lakhs? How to File NIL Service Tax return with Circular No 033/2012

The government is willing to provide equal opportunity and hence exempt Small Service Provider from liability of Service Tax and complex Compliance requirement. Service Tax is levied based on turnover of services provided. The threshold exemption limit of Rs. 4 lakhs was raised to Rs. 8 lakhs from 2007, later in 2008 it was further increased Rs.10 lakhs. Via Notification No. 33/2012-ST dated 20-6-2012, with this all previous Notification are superseded.

How to claim exemption and how to calculate amount of Exemption

For availing exemption under Notification No 33/2012-ST., the precondition is the aggregate value of taxable services rendered by a provider of taxable service from one or more premises, does not exceed ten lakh rupees in the preceding financial year. Following is an Example in which it is explained

Year

Receipts during FY

Exemption (N 33/2012)

Taxable Service

2012-13

14 Lakhs

10 Lakhs

4 Lakhs

2013-14

5 Lakhs

No Exemption

5 Lakhs

2014-15

17 Lakhs

10 Lakhs

7 Lakhs

2015-16

8 Lakhs

No Exemption

8 Lakhs

2016-17

4 Lakhs

4 Lakhs

Zero

 

So, in 2012-13 there will be an exemption of Rs. 10 Lakhs assuming that either 2011-12 is the first year of business or the receipts are below thereshold limit and tax will be levied on 4 Lakhs. Now since for year 2013-14 the preceding year is 2012-13 in which the aggregate was above 10 lakhs hence there will be no exemption in 2013-14 and full 5 Lakhs will be taxable. However, again in 2014-15 the preceding year is 2013-14 in which the aggregate was below 10 hence there will be an exemption of 10 Lakhs and tax will be levied on 7 Lakhs. So in similar lines as 2013-14, tax shall be levied on 8 Lakhs in 2015-16. Similarly in year 2016-17 if the receipts are 4 Lakhs and in previous year also receipt are less than 10 Lakhs then there would be no service tax payable as per the exemption notification.

At the time of filing return you have to select relevant Notification and claim exemption as applicable

 

Important Points to Note

  • The exemption scheme is meant only for service providers. To avail the exemption, the person should be a service provider only
  • Service receivers who avail the services but are person liable to pay the tax under Section 68(2) as a special case are not the service providers. Service receivers cannot claim the benefit of exemption scheme
  • Cenvat credit can be taken as per rules subject to fulfilment of the specified conditions of being on input service as per Notification 
  • The Services Fall under reverse charge mechanism like arbitral tribunal, legal services, renting of vehicles, works contracts, manpower supply, security services, directors service etc shall have to pay service tax and in such cases, benefit of exemption scheme will not be available to service receiver.
  • Small service provider scheme does not apply to taxable services provided by a person under a brand name or trade name whether registered or not.
  • Where refund was claimed by small assessee under exemption limit, it was held in court that there is no provision to change option once the exemption
  • The aggregate value means the sum total of value of taxable services charged in the first consecutive invoices issued during a financial year but does not include value charged in invoice issued towards such services which are exempt from whole of service tax leviable thereon under section 66B of the said Finance Act under any other notification.

 

 

 

COPY OF NOTIFICATION

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

Government of India
Ministry of Finance 
(Department of Revenue)

Notification No. 33/2012 - Service Tax

 

New Delhi, the 20th June, 2012

 

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Finance Act), and in supersession of the Government of India in the Ministry of Finance (Department of Revenue) notification No. 6/2005-Service Tax, dated the 1st March, 2005, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide G.S.R. number 140(E), dated the 1st March, 2005, except as respects things done or omitted to be done before such supersession, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts taxable services of aggregate value not exceeding ten lakh rupees in any financial year from the whole of the service tax leviable thereon under section 66B of the said Finance Act:

 

Provided that nothing contained in this notification shall apply to,-

(i) taxable services provided by a person under a brand name or trade name, whether registered or not, of another person; or

(ii) such value of taxable services in respect of which service tax shall be 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.

 

2. The exemption contained in this notification shall apply subject to the following

conditions, namely:-

 

(i) 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;

(ii) the provider of taxable service shall not avail the CENVAT credit of service tax paid on any input services, under rule 3 or rule 13 of the CENVAT Credit Rules, 2004 (herein after referred to as the said rules), used for providing the said taxable service, for which exemption from payment of service tax under this notification is availed of;

(iii)the provider of taxable service shall not avail the CENVAT credit under rule 3 of the said rules, on capital goods received, during the period in which the service provider avails exemption from payment of service tax under this notification;

(iv) the provider of taxable service shall avail the CENVAT credit only on such inputs or input services received, on or after the date on which the service provider starts paying service tax, and used for the provision of taxable services for which service tax is payable;

(v) 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;

(vi) the balance of CENVAT credit lying unutilised in the account of the taxable service provider after deducting the amount referred to in sub-paragraph (v), if any, shall not be utilised in terms of provision under sub-rule (4) of rule 3 of the said rules and shall lapse on the day such service provider starts availing the exemption under this notification;

(vii) 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; and

(viii) the aggregate value of taxable services rendered by a provider of taxable service from one or more premises, does not exceed ten lakh rupees in the preceding financial year.

 

3. For the purposes of determining aggregate value not exceeding ten lakh rupees, to avail exemption under this notification, in relation to taxable service provided by a goods transport agency, the payment received towards the gross amount charged by such goods transport agency under section 67 of the said Finance Act for which the person liable for paying service tax is as specified under sub-section (2) of section 68 of the said Finance Act read with Service Tax Rules, 1994, shall not be taken into account.

 

Explanation.- For the purposes of this notification,-

 

(A) "brand name" or "trade name" means a brand name or a trade name, whether registered or not, that is to say, a name or a mark, such as symbol, monogram, logo, label, signature, or invented word or writing which is used in relation to such specified services for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified services and some person using such name or mark with or without any indication of the identity of that person;

(B) "aggregate value" means the sum total of value of taxable services charged in the first consecutive invoices issued during a financial year but does not include value charged in invoices issued towards such services which are exempt from whole of service tax leviable thereon under section 66B of the said Finance Act under any other notification."

4. This notification shall come into force on the 1st day of July, 2012.

 

 

[F.No. 334 /01/2012- TRU]

 

(Raj Kumar Digvijay)

Under Secretary to the Government of India

 

 

 

 

 

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article author Ashish Kaushik
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If u could just upload snapshot st-3 , exactly depicting it. That would b great.


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Give me your email ID I will mail you screen shot


article author Piyush
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Good info.


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Chirag ji mail me screen shot at :- nishant@snspl.com. 9899622184 Please also share your email id and number for legal consultations


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