Applicability & valuation of service tax on commission
This query is : Resolved
23 January 2013
A manufacturer (X) is supplying material directly to a customer (Y) in the same state under VAT against an order received through a dealer (Z). Z is involved in the transaction to get the order to the manufacturer for this supply. Z also pays money to X for the sale proceeds for which Z also receives commission from X. T
he dealer (Z) in turn realises the money from Y directly against a debit note.
Please confirm applicability of service tax on this service of Z to Y. What would be the service component on which this service tax is applicable ?
Similarly when Z is raising a debit note for commission to X should he charge service tax?
he dealer (Z) in turn realises the money from Y directly against a debit note.
Please confirm applicability of service tax on this service of Z to Y. What would be the service component on which this service tax is applicable ?
Similarly when Z is raising a debit note for commission to X should he charge service tax?
23 January 2013
Dear KV Varadharajan
As per the query asked by your good self I am of the opinion that the commission earned by the Mr. Z from Mr. X falls under :Business Auxiliary Services" reason being he is facilitating him for sale of goods. SO it clearly a business auxiliary service.
Now, for the payment received by Mr. Z from Mr. Y, to this there is no service provided the consideration received is simply towards the sale of goods and sale of goods is exempted from service tax under negative list.
CA JAYANT BOTHRA
M: 9911-550-210
As per the query asked by your good self I am of the opinion that the commission earned by the Mr. Z from Mr. X falls under :Business Auxiliary Services" reason being he is facilitating him for sale of goods. SO it clearly a business auxiliary service.
Now, for the payment received by Mr. Z from Mr. Y, to this there is no service provided the consideration received is simply towards the sale of goods and sale of goods is exempted from service tax under negative list.
CA JAYANT BOTHRA
M: 9911-550-210
24 January 2013
Dear Mr.Jayant Bothra,
Thanks for the promot response.
The payment claim by Mr.Z is being made from Mr.Y by way of a debit note for the sale done by Mr. X to Mr.Y directly
Can Z raise a debit note on Y for this purpose - please clarify and confirm that still no service tax would be applicable...
Thanks and regards
Thanks for the promot response.
The payment claim by Mr.Z is being made from Mr.Y by way of a debit note for the sale done by Mr. X to Mr.Y directly
Can Z raise a debit note on Y for this purpose - please clarify and confirm that still no service tax would be applicable...
Thanks and regards
24 January 2013
Dear Sir,
The payment received by Mr. Z is forwarded to Mr. X against which he is getting commission. So, ultimately Mr. Z is giving services to Mr X. Further, Mr Z is not charging any thing extra from Mr. Y apart from the goods consideration.
The payment which Mr. Z is receiving is on the behalf of Mr. X only. NO SERVICE TAX IS APPLICABLE ON THE CONSIDERATION RECEIVED BY MR. Z FROM MR Y
Thanks & Regds
CA JAYANT BOTHRA
M: 9911-550-210
The payment received by Mr. Z is forwarded to Mr. X against which he is getting commission. So, ultimately Mr. Z is giving services to Mr X. Further, Mr Z is not charging any thing extra from Mr. Y apart from the goods consideration.
The payment which Mr. Z is receiving is on the behalf of Mr. X only. NO SERVICE TAX IS APPLICABLE ON THE CONSIDERATION RECEIVED BY MR. Z FROM MR Y
Thanks & Regds
CA JAYANT BOTHRA
M: 9911-550-210
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Inventory of finished goods
- Tds on building rent monthly
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Sale of property furniture sale
- RCM INVOICING FROM NOV-2024
- Disallowance of Section 43B(h) to sez units
- Clarification on Documentation of Paid-Up Capital Contribution by Directors
- GST Regis.
- Can we claim ITC of Feb-2024 in the month of November-2024 which was not claimed by oversight
- Confusion around Form 26QB fields
- As per schedule III of balance sheet how to pass journal entry
- Is correct way to find out capital of individual on 31st March
- Individual capital equal to which assets of balance sheet
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
Trending Online Classes
CAclubindia
