Pradeep Jain - Chartered Accountant

I want to know about calculation of SSI limit 10lacs in case of service provider provide service to bodycorporates and comes under reverse charges. say billed 12 lac and 50:50 is applicable. So can i say that i am not liable to pay as i m responsible for 50% i.e. 6lacs ans basic exemption can i claim

For the purpose of determining eligibility of small scale exemption in the current year, what is relevant is that “aggregate value of taxable services rendered” in the previous financial year should not exceed Rs 10 lakhs. “Aggregate value” means the sum total of value of the 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 66 of the Finance Act under any other notification”. Moreover, small scale exemption is not available to the service recipient for the services on which service tax is payable under reverse charge mechanism. We submit that in case of a service provider providing the works contract services on which service tax is payable only to the extent of 50%, the service provider cannot claim 50% of the value of service as the “taxable value” for the purpose of computing small scale service provider exemption. The reason for the same is that 50% liability is casted on the service recipient and it does not mean that there is 50% exemption to the service provider. Accordingly, the value of taxable services for the purpose of SSI exemption would be Rs. 12 Lakhs in the present case and not Rs. 6 Lakhs. {Query replied by Ranu Dhoot}

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