No Service tax can be levied when gross reciepts are less than 10L

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT Delhi) in the matter of M/s K.B. Singh Vs. Commissioner, Customs, Excise and Service Tax ruled out that No Service tax can be levied when gross reciepts are less than 10L.

The appellant is engaged in providing services of “maintenance and repair” and “commercial and industrial construction” and had provided such services to Nagar Palika Garhakota and M/s M.P. Warehousing and Logistics Corporation, Jabalpur and had not taken service tax registration nor paid service tax on the amounts received towards such services.

A show cause notice dated 08.04.2010 was issued by the Deputy Commissioner, Central Excise, Jabalpur calling upon the appellant to explain why the service tax should not be recovered under Section 73 and why penalties should not be imposed.

The Coram found out that, “the appellant Shri Ashish Batra does not dispute that the appellant had provided services as alleged and had received consideration for the services. He submits that during the period 2007-2008 an amount of Rs. 13,55,970/- was received for commercial construction services. An abatement of 67% of this receipt is available to the appellant towards the cost of material. He submits that an amount of Rs. 1,95,722/- was also received by the appellant towards repair and maintenance services during the year. According to him, if the abatement from the amount towards commercial construction services is considered, the value of the total taxable services rendered during 2007-2008 will be only Rs. 6,43,193/-. For the year 2007-2008 the threshold exemption for charging service tax was Rs. 8,00,000/-. Similarly, for the period 2008-2009 he submits that the total amount received for services after abatement will be only Rs. 3,55,419/- which would well below the exemption limit of Rs. 10,00,000/-“

The Tribunal ruled out that, “In view of the above, the impugned order is modified by setting aside the demand for the year 2008-2009 along with interest and the penalties imposed under Sections 76 and 78 for this period. The remaining part of the impugned order is upheld. The appeal is disposed of, as above, with consequential relief, if any, to the appellant.”

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