Is any limit to registration under service tax, for me is it necessary?
Answer:
The definition of Business Auxiliary Service under the Finance Act 1994 as amended is as under:
“business auxiliary service” means any service in relation to, —
(i)promotion or marketing or sale of goods produced or provided by or belonging to the client; or
(ii)promotion or marketing of service provided by the client; or
(iii)any customer care service provided on behalf of the client; or
(iv)procurement of goods or services, which are inputs for the client; or
Explanation.— For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, “inputs” means all goods or services intended for use by the client;
(v)production or processing of goods for, or on behalf of, the client;
(vi)provision of service on behalf of the client; or
(vii)a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision,
and includes services as a commission agent, but does not include any information technology service and any activity that amounts to “manufacture” within the meaning of clause (f) of section 2 of the Central Excise Act, 1944 (1 of 1944).
Explanation. — For the removal of doubts, it is hereby declared that for the purposes of this clause, —
(a)”commission agent” means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person —
(i)deals with goods or services or documents of title to such goods or services; or
(ii)collects payment of sale price of such goods or services; or
(iii)guarantees for collection or payment for such goods or services; or
(iv)undertakes any activities relating to such sale or purchase of such goods or services;
however, if the commision earned by a commission agent is less than Rs.4 lakh in a financial year; he is exempt from service tax if his commission does not exceed Rs 4 lakh in last year
commission from cloth sale is exempt from service tax under Business Auxilliary Service
the 4 lac limit is for turnover, not income or profit. If ur total turnover is more than 4 lac u have to register.
You are mixing up the query. The exemption limit for Service Tax is annual turnover (gross receipts). As far as profit and personal income is concerned, service tax has nothing to do. It is concerned with Income Tax. There are some services which are exempted from service tax, even if they are above the threshold limit. For more information, log on to http://www.servicetax.gov.in OR talk to a good Chartered Accountant for the same.
The answers post by the user, for information only, BAnswer.com does not guarantee the right.
Other Questions and Answers: