As per Notification No. 33/2012-S.T. dated 20.06.2012
Exemption is provided upto 10 lacs in cuirrent year if total value of all taxable services is upto 10 lacs in last year,
- This exemption is for service providers only not in case of reverse charge (where service receiver pays service tax)
- If more than one service provided, (the aggregate value)total turnover of all services should be taken to calculate 10 lacs limit
- Exemption scheme is optional. The service provider can opt not to take this exemption, If such option availed, it cannot be withdrawn throughout the year.
- If brand name of others used while providing services, then this exemption not available.
Whether Credit available if exemption claimed??
- No cenvat available till exemption claimed.
- Cenvat on those input services, inputs and capital goods which are received after SERVICE become taxable is available
Earlier service was taxable, now exemption claimed
If there is stock of inputs on which cenvat was claimed.then an amount equal to such inputs inputs lying in stock or in process on the date on which he starts availing the said exemption
Note:-Both cenvat on inputs contained in raw material or wip are to be paid.However,capital goods not covered here.
If there is balance in Cenvat account, it will lapse
SSP Exemption for Goods transport company
There is normally reverse charge applicable if consignor or consignee is
- any factory registered under or governed by the Factories Act, 1948 (63 of 1948);
- any society registered under Any Act like Society Registration Act
- any co-operative society under any law;
- First Stage Dealer or Second stage deale r ( any dealer of excisable goods, who is registered under the Central Excise Act, 1944 (1 of 1944) or the rules made there under;)
- any body corporate established, by or under any law; or
- any partnership firm whether registered or not including association of persons;
In other cases,truck operator is liable to pay service tax
Example:- Both consignor and consignee are Individuals
(For calculation of Rs 10 lacs limit,only those servce to be taken for which truck operator is liable to pay service tax and not consignot and consignee
ABC Ltd., a carrying and forwarding agency, started its operations on August 1, 20XX. It
utilized the services of Big Carriers, a goods transport agency, in the month of September,
20XX. Big Carriers have communicated to ABC Ltd. that service tax on the services provided
by them is required to be paid by ABC Ltd. under reverse charge. However, ABC Ltd. has
communicated to Big Carriers that it is eligible for small service provider (SSP) exemption in
the current financial year. Consequently, it will not pay service tax under reverse charge also.
You are required to critically examine each stand of the two parties and arrive at the final
Stand taken by Big Carriers: Entire service tax payable on services provided by a goods
transport agency is liable to be paid by service receiver if the person who pays freight is , inter
alia, a body corporate. Thus, the stand taken by Big Carriers is correct in law.
Stands taken by ABC Ltd.: Notification No. 33/2012 ST dated 20.06.2012 exempts taxable
services of aggregate value not exceeding ` 10 lakh in any financial year from service tax, if
the aggregate value of taxable services rendered by service provider, from one or more
premises, does not exceed ` 10 lakh in the preceding financial year. This exemption is called
as small service provider (SSP) exemption.
Since, ABC Ltd. has started its operations in the current financial year, it will be eligible for
SSP exemption in the said financial year as the turnover of services in the previous year
would be nil (less than 10 lakh). Thus, stand of ABC Ltd. to the extent that it is eligible for
SSP exemption is correct in law.
However, it is to be noted here that such exemption is in respect of services provided and not
services received. Further, liability of service provider and service recipient are different and
independent of each other. Thus, whereas ABC Ltd. can enjoy the benefit of SSP exemption
in respect of services provided by it, it cannot avail the same benefit in respect of servic es
received by it. Hence, ABC Ltd.’s contention that since it enjoys SSP exemption, it is not
required to pay service tax under reverse charge also, is not correct. It shall have to pay
service tax on goods transport agency’s services received by it from Big Carriers under