On liquidity damage

This query is : Resolved

maumita (Querist)
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08 July 2013 Is Service Tax is charged on LD under contract.Invoice amt rs 100 +4.944 total Rs 104.944 . But there is LD @10% deducted by service Receiver .So they deducted LD from Invoice value .Kindly help me that how munch service tax is paid by Us.

And also LD regarding Service Tax Issue also elaborate.

Pradeep Nainawati

Pradeep Nainawati (Expert)
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08 July 2013 If the service recipient is deducting 10% as liquidity damage then too you have to pay tax on full amount

But u can issue a credit note to service recipient and can take credit of the same in subsequent period. For further reference pls see Rule 6(3) of Service tax Rules 1994