We are into the business of cosmetics treatments , where service tax is applicable @14% .
WE came to know that one of our competitors is issuing invoices where service tax is not shown separately.
(1)They are showing TIN number on the invoice but not service tax number. (2) There is a statement on bottom of invoice : Amount paid inclusive of taxes as applicable.
(3) As per one insider they pay partial service taxes as they divide revenue into material and service. And pay pay service tax on service part only.
(4) Please enlighten me , is their method legally correct ?
When the Service Tax not shown separately then it is assume that it is inclusive of taxes for service receiver in so Service receive has to calculate the backward calculation to get service tax amt.
Can someone issue invoice mentioning "inclusive of applicable taxes" and then not paying 14% service tax on whole amount by splitting amount into material and service ?
CAclubindia
