1) Does a registered partnership firm availing services from a GTA must register & pay service tax if the consignment is beyond limit of 750/1500 on consignment?
2) If the invoice raised doesn't have service tax details, how to compute ST on the gross amount? can such ST portion be deducted and be paid net to the GTA? (Eg: Invoice 15000 and say ST is 1000 shud i pay to GTA 14000 or 15000 and 1000 firm's expense?)
3) can abatement of 75% & cenvat credit be availed by the partnership firm?
03 January 2010
(1) YES,a registered partnership firm availing services from a GTA must register & pay service tax (2)For example, if Bill amount is Rs. 1,000 and service tax is not shown separately in Invoice, the tax payable calculated by a simple mathematical formula is as follows -
Assessable Value = (Cum tax price)/(1 + rate of tax)
Assume that Assessable Value (AV) is equal to ‘Z’.
AV = 1.000 Z
Duty @ 10.30% = 0.1030 × Z
Sub-Total = 1.1030 × Z
Now :
1.1030 × Z = 1,000
Hence, ‘Z' = 1,000/1.1030
i.e. Z = 906.61
Thus, ‘Z’, i.e. Assessable Value is Rs 906.62 and service tax @ 10% will be Rs 90.66. Education cess @ 2% of service tax will be Rs 1.82. SAH education cess is Rs 0.91. Thus, total tax will be Rs 93.39.
If Bill is of Rs 1,103.00 (Rs 1,000 plus service tax of 103.00) and customer pays only Rs 1,000, the ‘value’ will be Rs 906.61 and tax payable will be Rs 93.39 by making back calculations - Para 6.5 of FAQ released by CBE&C in November 2007 (12 STT 1 (St) = 9 STR C3).
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