Small scale exemption for GTA

Share
Share This Thread
  1. franklings

    franklings New Member

    . I am running GTA ( not owner of any vehicle . only hiring) .From the total bill amount of GTA in a year , if i deduct first the abated amount and then deduct the fully exempted items amount , after that if the turnover amount comes below 10 lakhs ,can i avail small scale exemption of service tax ?
     
  2. ZED

    ZED Well-Known Member

    1st avail the limit of 10 Lakhs and then apply abatement to the turnover after 10 Lakhs.
    Reason for this is explained below.

    As per Notification No. 33/2013 (SSP exemption)
    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 shall be exempt.


    (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.”




    Literally interpreting the provisions, the only exclusion has been for for those services which are exempted from WHOLE of the service tax leviable u/s 66B. When abatement is provided, the service is not exempted from whole of the value of the service. Further Exemption is provided from the value as computed as per S.67 and the rules made there under (SERVICE TAX (DETERMINATION OF VALUE) RULES, 2006).

    When abatement is provided then it is provided fromservice tax and not from the value of the service. Though in reality, the object was to remove the value of the GOODS. But because of the specific wordings. We have to consider the value. Abatement notification did not decreased the value unlike the SERVICE TAX (DETERMINATION OF VALUE) RULES, 2006 ,which did decreased the value of the service.


    Extracts of the E/N 26/2012
    The Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service of the description specified in column (2) of the Table below, from so much of the service tax leviable thereon under section 66B of the said Act, as is in excess of the service tax calculated on a value which is equivalent to a percentage specified in the corresponding entry in column (3) of the said Table, of the amount charged by such service provider for providing the said taxable service,



    Further, Exemption notification 26/2012 has been issued by deriving the power not from S.67, but from S.93

    93. Power to grant exemption from service tax. – (1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally or subject to such conditions as may be specified in the notification, taxable service of any specified description from the whole or any part of the service tax leviable thereon.

    (2) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by special order in each case, exempt any taxable service of any specified description from the payment of whole or any part of the service tax leviable thereon, under circumstances of exceptional nature to be stated in such order
     
  3. franklings

    franklings New Member

    For example my turnover is 50 lakhs in a year . Around 40% of items are exempted form service tax( rice, pulses, milk, salt , foodgrains etc...) ie 20laks are exempted . In remaing 30 lakhs 70% is abated .ie 3000000 - 2000000 = 9 lakhs .Now my taxable service is 9 lakhs only. Can I get small scale exemption now ? OR whether I have to pay service tax for the 9 lakhs?.or if i can convince the authority that the nature of my business is purely related to the welfare of the defence personals /ex-service men and their families can I get service tax exemption
     
  4. ZED

    ZED Well-Known Member

    Sir, this time please read only the coloured text in the definition of aggregate value.


    (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.”


    In case of commodities like milk, salt , foodgrains etc, these have been exempted from whole of the service tax. Therefore, if the turnover is 50 Lakhs and 20 Lakhs relates to these items then your turnover shall be treated as 30 Lakhs.

    Now, since 30 Lakhs is more than 9 Lakhs, you need to get registered for Service tax.

    You are not eligible for SSP exemption because your turnover before providing abatement is more than 10 Lakhs.



    No.
     
  5. franklings

    franklings New Member

    Since the business is purely based on the welfare of public interest ,can the authority have the power to give exemption
     
  6. ZED

    ZED Well-Known Member

    Sub section 2 to section 93 of the Finance Act 1994 empowers the Central Government to grant exemption in special cases [specifically to a person] it deems it necessary to grant the exemption for public interest.

    [You may try. Chances are low.]
    [Low doesn't mean impossible.]



    S.93(2)If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by special order in each case, exempt any taxable service of any specified description from the payment of whole or any part of the service tax leviable thereon, under circumstances of exceptional nature to be stated in such order.
     
  7. franklings

    franklings New Member

    Defence persons including Army /Navy and Airforce and their EX -service men are exempted from paying service tax in which services /point of services / category of services. please provide section and notification
     
  8. ZED

    ZED Well-Known Member

    There is no such notification in my knowledge.
     
  9. franklings

    franklings New Member

    Defence persons including Army /Navy and Air force and their EX -service men are exempted Or/ Not from paying service tax for purchase of Canteen Stores Department(CSD) ,Ministry of defence,Grocery /liquor items.If exmpted ,Why GTA billing and collectiong ST from concerned Unit Run Canteen of CSD? If ST including in the billing ,ultimately it will effect the defence personal and their Ex service men. So GTA need not add service tax in the bill ,Is it correct?
     
  10. ZED

    ZED Well-Known Member

    In my knowledge they are not exempted.
    If they are, then kindly provide the exemption notification no. for the same.

    ST should be leviable.
     
Draft saved Draft deleted
Loading...