Small service provider has been provided various exemptions in Service tax Act. The provisions in this regard are provided below: Turnover threshold: The Service Tax Act says that, every person whose aggregate turnover of taxable services from all the premises in the previous year does not exceed Rs.10lacs (known as small service provider) is exempt from payment of service tax. In addition to this, if a service provider crosses turnover of Rs.10lacs in current year, he will be liable to service tax only on the excess amount above Rs.10lacs and not on his earlier turnover so long as his turnover remains less than Rs.10lacs. Liability to Pay Tax: Moreover, if a service is newly made taxable, the services provided by the service provider in the previous year will not be “taxable service”. But, it is to be noted that for calculating aggregate value of taxable service, billing made by service provider is not relevant, payment received is relevant. Hence, even if billing exceeds Rs.10lacs, there is no liability till the “payment received” exceeds Rs.10lacs. So, the service provider will not be required either to charge or pay service tax on such Bills during such period. Registration requirements: Small service provider has been provided exemption from registration as well. They are not liable to get his premises registered with the concerned officer if the turnover of taxable services does not exceed Rs.9lacs. Thus a small service provider can avail a two – way benefit if his turnover is less than Rs.9lacs, that is, he is not liable to tax as well as he is not required to get a registration certificate. Provisions relating to filing of Return: It is very important to note that a small service provider is not required to file his return. Though there is no such provision in relation to above context, but the Act specifies that “every assessee is required to file his half yearly return” and here “assessee” means a person liable to pay tax. So, it is well understood as a small service provider is not liable to service tax so he cannot be defined as an “assessee” in the eyes of law and as a result they are not required to file return. But, the small service provider has the option not to avail the exemption and pay service tax on the taxable value of service provided by him. It should be noted that once such an option is exercised in a financial year, it cannot be withdrawn during the same financial year. He can change the option in the next financial year. Moreover, the exemption from payment of service tax is not available to service receiver if they are liable to pay service tax. Taxmantra.com will assist you in all Business Maintenance issues including your service tax issues, such as filing of returns , levy of services, taxability and in any other service tax related queries.