How to Calculate Service Tax & CENVAT

This query is : Resolved

Pratik (Querist)
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17 December 2010 Mr.A started his business 01/04/2010(Advertising Agency(Sub)
Sales Bill Amount Rs. 10,000 + 103 (Rs.10,000 x 10% Commission) = Rs10,103.00
Client Bill Amount Rs. 10,103.00 & Mr.A send this Advertisement Newspaper, Press Bill Amount Rs. 9,000.00 Mr.A income only Rs. 1000 & collect service Tax Rs. 103 to his client.
(1000 x 10.30% service Tax = Rs. 103)
This is Correct Method. Mr. A only received Commission Rs. 1000 through Press.

Mr. A claim CENVAT. Mr.A send advertise to Mr.B(Sub-Agency) Mr.B Sales Bill Rs.9000+Rs.93 = Rs.9093 so, Service tax paid Rs.103-Rs.93 = Rs.10

so, Mr.A claim Rs.93 as a CENVAT, If you no Please guide me

ADITYA

ADITYA (Expert)
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17 December 2010 Dear Pratik,

Mr A have to charge Service Tax on the Full Billing Amount of Rs 10,000/= and not on the his profit margin.

Mr A can claim set off on (Insput Service) the Advertisement Bill, he receives from New Paper while paying his Service Tax liability.