25 July 2007
DEAR SIR, PLS. CLARIFY THE FOLLOWING:
A PVT. LTD. CO. PROVIDE MAINTENANCE, MANAGEMENT AND REPAIR SERVICES TO A SUPER MARKET CONTAINING ABOUT 200 SHOPS. IT CHARGES RS. 1500 PER MONTH FROM EACH SHOP FOR THE FOLLOWING SERVICES:
1.CLEANING 2.WATER & SEWERAGE 3.ELECTRICITY 4.LIFT OPERATION 5.GENERATOR RENT 6.MATERIAL USED IN PROVIDING SERVICES
CAN WE DO ANY TAX PLANNING TO SAVE SERVICE TAX. IF YES, HOW ?
25 July 2007
But arrangements can be made where material would be provided by shops (off course arranged by the Pvt Company). Shops can also get benefit of these expenses and Pvt company can save service tax
26 July 2007
The draft circular of the CBEC says, "Any goods used in the course of providing service are to be treated as inputs for providing the service and accordingly, cost of such inputs should form integral part of the value of taxable service."
I my opinion, the above arrangement will reasult in undervaluation of taxable service.
CAclubindia
