Interest and penalty on delayed payment of service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 December 2013 We are providing service to an NGO and the total contract is of Rs 18 lac payable quarterly (start of the quarter) against invoice. we have issued invoice on 10 Sept for Rs 9 lac without any service tax since till 10 lac ST is exempted. Our next bill was raised on 10th Dec on which ST of Rs (900000/112.36)*12.36%=99003 has been charged and invoice amount is Rs 800997. Is this correct method or service Tax has to be paid on the first 9 lac also, pls reply it is urgent

AJITHKUMAR M

AJITHKUMAR M (Expert)
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19 December 2013 Dear friend,

It seems that the taxable value for the last financial year was below 10 lakhs. If there is no specific mention that service tax will be paid extra, then the amount is to be considered as inclusive of service tax. Therefore, the calculation done by you is correct. There is no need of paying service tax on the first 9 lakhs, provided you have not issued the bill without indicating the service tax component.