Basic Exemption Limit for Small Service Providers
In Its pre-budget memorandum-2014 on Indirect taxes Institute of Chartered Accountants of India (ICAI) has suggested that Current Service Tax Exemption Limit of Rs. 10 Lakh should be increased to Rs. 25 Lakh. It has submitted as follows :-
The service tax exemption limit for small service providers in terms of Notification No. 33/2012 ST dated 20.06.2012 is currently limited to Rs.10,00,000/-. It is proposed to extend the exemption limit due to the following reasons:
(i) Small service providers are poor, uneducated and mainly in the unorganized sector.
(ii) Limit was not enhanced since 1st April, 2008
(iii) After 1.7.2012 post Negative list era, more services are under the ambit of service tax, which earlier was not includible in the exemption limit.
It is suggested to extend the exemption limit to Rs.25,00,000/-.