Small service provider’s (SSP) exemption :
Central Government has exempted the taxable services of aggregate value not exceeding Rs 10 lakh in any financial year from the whole of the service tax leviable thereon under section 66B of the Finance Act, 1994 in case the aggregate value of taxable services rendered by the service provider from one or more premises, does not exceed Rs 10 lakh in the preceding financial year.
A. Services in respect of which SSP exemption is not available
(i) Taxable services provided under brand name: SSP exemption is not available to the taxable services provided by a person under a brand name or trade name, whether registered or not, of another person.
(ii) Services taxed under reverse charge mechanism: SSP exemption is not available to such value of taxable services in respect of which service tax is payable on reverse charge mechanism by a person.
B. Availability of the CENVAT credit on inputs, input services and capital goods
(i) CENVAT credit on input services
(a) The provider of taxable service shall not avail the CENVAT credit of service tax paid on any input services used for providing the said taxable service, for which SSP exemption is availed of. The said restriction is applicable to service tax paid under rule 3 and rule 13 of the CENVAT Credit Rules, 2004.
(b) The provider of taxable service shall avail the CENVAT credit only on such 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.
(ii) CENVAT credit on inputs
(a) Service provider shall avail the CENVAT credit only on such inputs 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.
(b) A service provider who starts availing SSP exemption 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 he starts availing the said exemption. Balance credit shall not be utilised in terms of rule 3(4) of the CENVAT Credit Rules, 2004 and shall lapse on the day such service provider starts availing SSP exemption.
(iii) CENVAT credit on capital goods: Service provider shall not avail the CENVAT credit on capital goods received, during the period in which the service provider avails SSP exemption.
C. Other points which merit consideration
(i) Exemption is optional: Service provider has an option not to avail the SSP exemption and pay service tax. Option, once exercised in a financial year, shall not be withdrawn during the remaining part of such financial year.
(ii) Aggregate value of all taxable services provided from all premises to be considered: 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.
D. Aggregate value of taxable services in case of Goods Transport Agency: In case of goods transport agency (GTA), for the purposes of determining the aggregate value not exceeding Rs 10 lakh, to avail exemption under this notification, the payment received towards the gross amount charged by the GTA under section 67 of the said Finance Act for which the person liable for paying service tax is the consignor or consignee shall not be taken into account.
[Notification No. 33/2012-S.T. dated 20.06.2012]
| 1. 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.
2. 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. |