Mar 4, 2011

When is Service Tax applicable for a Private Limited company ?

The very basic information: if your turnover is less than 10 lakh Rupees (Rs. 10,00,000) you do not need to charge Service Tax to your clients, thus you don't even need to have a number for it, i.e. you don't need to register yourself for this purpose.

But I was gladly surprised to discover some time ago that even if your total turnover is great than 10 lakhs you may still not need to charge Service Tax! And it all depends on what services you are providing.

There are certain services that according to the fiscal law they are not liable to Service Tax, thus if you are providing those services, you (and your clients) need not worry about this hassle.

Even better, it could be that your company is providing more than one service, some of them taxable and others not. As long as those that are not taxable do not exceed 10 lakhs, you need not charge Service Tax.

It's important that you confirm with your Chartered Accountant that you need not register for Service Tax, and in turn, he will have to do some thorough research about this issue. Also, remember that rules change every year and something that was not taxable last year, may become taxable the next one so be careful and keep an eye on this.

Just in case you are into this business... IT services do have Service Tax. But Translations and Interpretations don't! At least for this year...


  1. is it possible for you to give a list of services which are taxable or nontaxable.. ?

    Or a link would also be helpful.


  2. Hi Nikhil,

    Sorry, that would be very difficult for me to do, and anyhow, it wouldn't make much sense because is a long list which may change every Financial Year. The most sensible thing to do is to approach your CA and ask him for the specifics of your business.

    All the best Nikhil!

  3. Hi,
    I would like to know about the applicability of service tax. When Finance Minister proposed the increase in service tax of 2% making it 12.3%, will this new rate be effective Mar 17,2012 or will come into effect Apr 1, 2012?

  4. i am doing job work for a company who have given me place in their premises. These jobs are send under excise challan 4(5)(a) only.Annually less than 1.5 cr is the turnover .
    should i take a service tax number ?