21 September 2011
Dear All, I have an important and urgent query.
An automobile company is liable to pay commission including service tax to their agents. But suppose instead of paying commission, if the co provides the spare parts in exchange of commission payable, then can the company can claim input credit on the commission payable.
PN :- The amount paid as spare parts are always higher than the commission payable.
21 September 2011
Yes you can claim input credit as for the purpose of input credit it is not necessary to be paid in cash only in kind will also be allowed.
22 September 2011
during the process of transfer of parts, the valuation is taken , then the same is shifted to commission account, this valuation is to be considered as commission. service tax is to be charged by the commission receipent, not the payee (paid only in case of reverse charge for commission paid outside india), and the commission receipent has option to avail 10L exemption on commission recd.
CAclubindia
