EXEMPTED SERVICES :
Taxation of services under the new scheme of taxation on a ‘NEGATIVE LIST’ Principle is subject to certain general exemptions and mega exemptions.
GENERAL EXEMPTIONS:
The following services which are exempted from service tax in general:
- Small service provider exemption : Small service provider (SSP) means a service provider the ‘aggregate value’ of taxable services rendered by whom ,from one or more premises ,does not exceed Rs.10 lakhs in the preceding financial year.
“Aggregate value” means –
- The sum total of value of taxable services charged in the first consecutive invoices issued or required to be issued ,as the case may be ,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 Act.
- In relation to taxable services provided by a GTA, the payment received towards the gross amount charged by such GTA for which the person liable to pay service tax is a person other than the GTA under reverse charge mechanism ,shall not be taken into account.
- Other considerations in determining the ‘aggregate value’:
- Services provided outside taxable territory are not to be included .
- For computing the ’aggregate value’ of taxable services for the purpose of determining eligibility for claiming SSP Exemption ,if any services provided by the assessee are Partially exempt/Abatement is provided under any other notification ,then the exempted portion will not be included in determining the aggregate value of taxable services for the SSP Exemption Notification.
- Services specified in ‘Negative List’ are not to be included in aggregate value.
- In case of service providers providing declared services ,only portion of service declared under section 66E will be considered.
SSP Exemptions shall not apply in the following cases :
- Taxable services provided by a person under a brand name or trade name whether registered or not ,of another person or
- Such value of taxable services in respect of which service tax shall be paid by such person and in such manner as specified in section 68(2) i.e. services taxable under ‘Reverse charge’
Conditions to be fulfilled : The exemption is subject to the following conditions-
- Exemption is optional for the assessee.
- No CENVAT Credit on input services used for providing the said taxable service for which exemption from payment of ST is availed of
(iii) No CENVAT Credit on capital goods received ,during the period in which the service provider avails exemption from payment of service tax under this notification.
- Exemption to apply service provider wise not for each taxable service or each premise.