09 June 2011
Dear sir, Basically we are the manufacturer of Liquor. we are doing liquor manufacturing at our distillery. Ours is Registered Partnership firm. We have our own brands production and also taken tieup with some 3 companies and we are doing bottling process for their products. But all sales and puchases will be generated in the name of our company only. We are selling the liquor (Finished Product) to Karnataka State Bewerages corporation. We are liable to pay service Tax on the following situations: 1) We are charging Bottling service charges through debit note on monthly basis with serivce tax @ 10.30% to our tieup companies. After submitting the debit note they (tie-up companies) will reimburse the same after deducting TDS @ 2%.. In this case we are collecting service Tax on bottling services provided to our tie up companies and the same will be payable. 2) In another case we are liable to payable service Tax on GTA (Freight inwards and outwards). Service Tax on GTA will be 25% of the freight value X 10.30%. In this case we are not collecting any service tax on Transporter and we are liable to pay service tax. Finaly we are payable service tax on the above said cases. Against the above service Tax payable we are taking the following SET OFFs for service tax. 1) On Telephone Bills Payable. 2) Labour services contract payments 3) Security services payable. 4) Insurance Charges 5) Credit card payments. 6) Repairs and maintenances. Etc., And we are purchasing Raw materials and packing materials to manufacturing of liquor from with in state and interstate. On those purchases we will pay CENVAT @ 10.30% also. OUR MAIN QUESTION IS CAN WE TAKE SET OFF THIS CENVAT PAID ON PURCHASES AGAINEST SERVICE TAX PAYABLE. FOR EXAMPLE FIND THE SERVICE TAX PAYABLE STATEMENT OF OUR COMPANY. 1) Service Tax payable Statement
S.No Details Service Tax payable for 1st Qtr Payble Set off 1 Service Tax collecting on Bottling works done for Tie-up companies 500,000.00 2 Service Tax payable on GTA Services (Freight Inward) 40,000.00 3 Service Tax payable on GTA Services (Freight Outwards) 50,000.00 4 Set off on the following Cases 1) On Telephone Bills Payable. 5000 2) Labour services contract payments 25000 3) Security services payable. 10000 4) Insurance Charges 40000 5) Credit card payments. 2000 6) Repairs and maintenances. Etc., 5000 Total amounts 590,000.00 87,000.00 Net Service Tax Payable amount ( Payable - Setoff) 503,000.00
2) CENVAT (Excise Duty) Paid on Purhcases for the 1st Qtr is Rs. 450,000.00 In the above situation we need to pay service Tax Rs. 5,03,000/-. Our main question Is can we take set off of the above CENVAT paid on purchases of Rs. 4,50,000/- against service Tax payable. If it is possible then we are liable to pay service Tax Rs. 53,000./- only. Please clarify CAN WE TAKE SET OFF OF CEN VAT PAID AGAINEST SERVICE TAX PAYABLE. IF NOT PLEASE MENTION THE REASONS.
CAclubindia
