From 1st April, 2008 threshold limit under service-tax is ten lakh rupees. This limit has been raised from Rs. 8 lakhs vide notification no. 8/2008 (Service-tax) dated 1st March, 2008.
Threshold limit was first notified by Service Tax Notification no. 6/2005 dated 1st March, 2005. The limit was proposed at Rs.4 lakhs w.e.f. 1st April, 2005. Before 1st April, 2005 there was no threshold limit. All assessess providing taxable services were required to pay service-tax.
Vide Service Tax Notification no. 4/2007 dated 1st March, 2007, notification 6/2005 was amended and threshold limit was raised to Rs. 8 Lakhs.
Service Tax Threshold Limit Table
| Dates of Taxable Service | Threshold Limit | Notification No. |
| 1-7-1994 to 31-3-2005 | Nil | Not Applicable |
| 1-4-2005 to 31-3-2007 | Rs.4,00,000/- | No. 6/2005-Service Tax dt. 1-3-2005 |
| 1-4-2007 to 31-3-2008 | Rs.8,00,000/- | No. 4/2007-Service Tax dt. 1-3-2007 |
| 1-4-2008 onwards | Rs.10,00,000/- | No. 8/2008-Service Tax dt. 1-3-2008 |
Conditions for exemption are laid down under notification no.6/2005 dt. 1-3-2005.
Threshold limit is to be calculated from 1st April for every financial year. Threshold limit is not available if aggregate value of taxable services rendered from one or more premises exceeds the threshold limit in preceding financial year.
Exemption under notification 6/2005 is not apply to
- taxable services provided by a person under a brand name or trade name, whether registered or not, of another person; or
- such value of taxable services in respect of which service tax shall be paid by such other person and in such manner as specified under sub-section (2) of section 68 of the said Finance Act read with Service Tax Rules,1994.
Conditions subject to which exemption is available :
- the provider of taxable service has the option not to avail the exemption contained in this notification and pay service tax on the taxable services provided by him and such option, once exercised in a financial year, shall not be withdrawn during the remaining part of such financial year;
- the provider of taxable service shall not avail the CENVAT credit of service tax paid on any input services, under rule 3 or rule 13 of the CENVAT Credit Rules, 2004 (herein after referred to as the said rules), used for providing the said taxable service, for which exemption from payment of service tax under this notification is availed of;
- the provider of taxable service shall not avail the CENVAT credit under rule 3 of the said rules, on capital goods received in the premises of provider of such taxable service during the period in which the service provider avails exemption from payment of service tax under this notification;
- the provider of taxable service shall avail the CENVAT credit only on such inputs or input services received, on or after the date on which the service provider starts paying service tax, and used for the provision of taxable services for which service tax is payable;
- the provider of taxable service who starts availing exemption under this notification shall be required to pay an amount equivalent to the CENVAT credit taken by him, if any, in respect of such inputs lying in stock or in process on the date on which the provider of taxable service starts availing exemption under this notification;
- the balance of CENVAT credit lying unutilised in the account of the taxable service provider after deducting the amount referred to in sub-paragraph (v), if any, shall not be utilised in terms of provision under sub-rule (4) of rule 3 of the said rules and shall lapse on the day such service provider starts availing the exemption under this notification;
- where a taxable service provider provides one or more taxable services from one or more premises, the exemption under this notification shall apply to the aggregate value of all such taxable services and from all such premises and not separately for each premises or each services; and
- the aggregate value of taxable services rendered by a provider of taxable service from one or more premises, does not exceed rupees four lakhs in the preceding financial year.
Explanatin “aggregate value not exceeding four lakh rupees” means the sum total of first consecutive payments received during a financial year towards the gross amount, as prescribed under section 67 of the said Finance Act, charged by the service provider towards taxable services till the aggregate amount of such payments is equal to four lakh rupees but does not include payments received towards such gross amount which are exempt from whole of service tax leviable thereon under section 66 of the said Finance Act under any other notification.
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