Applicability of service tax

This query is : Resolved

CA/CS Avijit Burman (Querist)
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18 July 2014 A company goyal gas supplies gases to our company.as per terms of agreement our company has to pay them a minimum guaranteed money if we do not procure minimum guaranteed gases from them.
Since we failed to procure minimum gases from them, they have submitted a bill claiming minimum guaranted money including service tax.

my question is that whether service tax will be applicable on that invoice? if so whether we can take credit of service tax.

since no service has been provided in this case.

please resolve

Arun Kumar Singh

Arun Kumar Singh (Expert)
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20 July 2014 Yes, service tax will be applicable and service receiver can claim the service tax if gas should be used in the manufacturing of final products or providing of services.