14 May 2010
This is to inform you that companies namely, A Ltd and B Ltd are situated in same premises. There are certain common expenses which are initially incurred by A Ltd. At the end of the year the said common expenses are allocated on turnover basis and accordingly debit note is issued to B Ltd. After issuing the debit note, A Ltd reimburses the expenses from B Ltd. This practice is consistently followed since inception of the company. There are no employees in B Ltd but employees of A Ltd working for B Ltd.
On the basis of the facts, whether service tax attracts to A Ltd. If yes under which section, under which services and from which date. Please advise us. It is further informed that till date we have not paid the service tax .
14 May 2010
Service tax is attracted under Business auxillary services. Find out whether your company has exceeded the basic limits if exceeded then service tax will apply. Now your company can register and pay the dues alongwith interest and penalty.
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