21 November 2010
Q1. Mr. A provide taxable service worth Rs. 12500 to mr. b, Mr. B in consideration provide Rs. 10000 in cash and a law book worth Rs. 2200
CASE I > What will be the amount of taxable Service & amount of service tax to be deposited ?
CASE II > what if Law book in worth Rs. 2600/- What would be the taxable service and service tax payable ?
22 November 2010
Dear Mr.Amit. As per Section 67 (1)(ii), "In a case where the provision of Service is for a consideration not wholly or partly consisting of money, be such amount in money as, with the addition of service tax charged is equvalent to the consideration.". Therefore you shall be liable to pay Service Tax on the amount you will be receiving from Service Reciver in terms of money plus the value of consideration, service provider shall be receiving. If you bill to your customer for Rs.10000/- towards an amount received in terma of monery and getting law book for Rs.2200 or 2600 (with documentory evidence), you shall pay service tax on 12200 and 12600/-.
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