Let me introduce first ,I am CA Final student is in the last stage of Article ship. My question is regarding the billing of service tax relating to the persons who is engaged in the collection agency services.One our client is engaged as collection agent of one of the leading private sector banks.His remuaration is in the form of commision and while paying the bill amount the bank is giving an additional amount of service tax .Is this agency proving service is coming under the ambit of service Tax liability,if yeas then on which services it will come?
27 February 2009
The agency is getting commission. The commission gets covered under Business auxiliary services. However you need to evaluate whether the gross income for a financial year exceeds Rs. 10 Lacs, if yes then service tax is laible to be charged by the Agency to the bank.
The agency has to charge the bank for the services, provided the above condition of 10 lacs is applicable, if not then no need to charge service tax as he stands covered under Small Service Provider (SSP).
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