Small service providers

The small service providers whose turnover of taxable services from one or more premises did not exceed

  • ten lakhs in 2012-13 will be exempt from service tax in next financial year i.e. in 2013-14 upto the turnover of
  • ten lakhs. The provisions are prescribed in Notification No. 6/ 2005-ST dated 1-3-2005 (The exemption limit was four lakhs upto 31-3-2007).
  • However, if value of taxable turnover exceeds 10 lakhs in 2012-13, there will be not exemption at all in 2013-14. For the purpose of determining eligibility in current year, what is relevant is that aggregate value of taxable services rendered’ in previous financial year should not exceed ten lakhs.
  • While for purpose of exemption upto first- ten lakhs in current year, service tax is exempt to the extent of aggregate value not exceeding ten lakhs,i.e. the sum total of first consecutive payments received during the current financial year.
  • The exemption to small service providers is available subject to following conditions –

• The provider of taxable service shall not avail the CENVAT credit of service tax paid on any input services.
• 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.
• The taxable services provided by a person under a brand name or trade name, whether registered or not, of another person; will not be eligible for exemption available to small service providers.
• Person providing taxable service in excess of ` nine lakhs per annum (but less than ` ten lakhs) will have to register with Superintendent of Central Excise under Service Tax provisions [Notification No. 26/2005- ST dated 7-6-2005], though they will be eligible for exemption if turnover is less than ` ten lakhs per annum.

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