02 August 2008
Dear All, I m In service providing PSU(Telecom) and Co. charging ST in Invoice. we r paying electricity bill of our customers and at this time debit the party for this paid amount. ST officials has taken objection, they told that we have to pay service tax on electricity bill. but i think this is not our service nor we r taking electricity charges in P&L A/c. we are just passing following enteries:- (1)at the time of payment Party Dr. To Bank (2)at the time of amount recived Bank Dr. To Party
Kindly suggest me whether ST official is right or wrong.
02 August 2008
The amount of claim from the customer does not include any profit element in itself which suo moto suggests that service is being given to the customer with no motive to make profit out of it, but just to promote the business. This is purely a transaction of reimbursement of expenses.
CAclubindia
