Gen service tax 10.30%

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 October 2011 While doing the calculation for quarterly service tax the formula we use is (service tax we have to paid - service tax we have already paid).In case of Gen service tax we have paid e.g inr 10000/- can we deduct the full amount from what we have to pay or only the 15% of that amount. Awaiting replies from experts.

CA VISHAL RANA,CS,B.Com,AMFI

CA VISHAL RANA,CS,B.Com,AMFI (Expert)
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24 October 2011 You are required to pay tax when service is provided or advance for services is received whichever is earlier..in above example you can deduct from full amount if you recived payment in advance.or otherwise deduct on full amount if service is already provided

Querist : Anonymous

Querist : Anonymous (Querist)

25 October 2011 I am not getting this expert view,pls can you explain in details.

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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25 July 2024 If I understand correctly, you're asking about how to calculate the service tax payable quarterly, specifically under the General (or standard) service tax rate of 10.30%. Here’s how you would typically approach this calculation:

1. **Calculate Service Tax Payable:**
- Determine the total value of taxable services provided during the quarter.
- Apply the service tax rate of 10.30% to this total value to find out the service tax payable.

2. **Adjustment for Input Tax Credit (ITC):**
- Input Tax Credit refers to the credit you can claim on the service tax already paid on inputs (services) used for providing your taxable services.
- For services on which you have already paid service tax (input services), you can claim Input Tax Credit against the service tax payable.
- Input Tax Credit is not deducted as a percentage of what you owe but rather as the actual amount of service tax paid on eligible input services.

3. **Example Calculation:**
- Suppose you provided taxable services amounting to INR 1L during the quarter.
- Service tax payable at 10.30% would be: INR 1L * 10.30% = INR 10,300.
- If you have already paid INR 10K as service tax on input services, you can claim this amount as Input Tax Credit.

4. **Adjustment of Input Tax Credit:**
- The adjustment is straightforward: deduct the Input Tax Credit amount from the total service tax payable.
- In the example, if you've paid INR 10,000 as service tax on inputs, deduct this amount from the INR 10,300 service tax payable:
- Service tax payable = INR 10,300 - INR 10,000 = INR 300.

5. **Final Service Tax Payment:**
- After adjusting the Input Tax Credit, the final amount of service tax payable for the quarter would be INR 300.

### Key Points:
- **Full Deduction:** You deduct the actual amount of service tax paid on input services (INR 10,000 in your case), not a percentage of it.
- **Input Tax Credit:** Ensure that the service tax you are claiming as Input Tax Credit is eligible under the GST rules and has been paid on inputs used directly in providing taxable services.

Always verify the specific rules and regulations regarding service tax and Input Tax Credit in your jurisdiction, as they may vary slightly. Keeping accurate records of service tax payments and eligible input taxes will help in ensuring compliance and optimizing tax liabilities.