18 October 2011
lets consider an example A is client and total work is of Rs. 100/- hence service tax on this will be Rs. 10/- ( not considering the Cess) hence total payment to be made by A to B is Rs. 110/- and total service tax to be paid/deposited by B to Govt. for providing his services to A is Rs. 10/- Now lets go further Now amongst the above work B is taking services from C for providing his service to A of lets say Rs. 60/- hence total payment to be made by B to C will be Rs66/- (Rs.60+Rs6 for service tax) n C will deposit Rs. 6 to Govt. but as service provided by C to B is input servce to B, So how can B take credit of Rs.6/- while paying his duty liability of Rs. 10/-.