Professional Fee Billling ST Empact

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 July 2011 Dear Friends

a compnay secretary/ Consulting Company paying MCA Payments from his Bank, later it is colleting from the client with professional fee

Whether the MCA Payments made by CS/Consulting Company will attract the Service Tax ?

Can the CS/Consulting Compnay claim as Pure agent for that MCA Payments?

What is the Best way of avoing ST net

CS VENKATARAMANAN S

CS VENKATARAMANAN S (Expert)
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15 July 2011 Dear friend,
The fee paid by the company secretary or consulting company to mca on behalf of the client. So it is not come under the purview of the service tax even he paid from his bank a/c. The professional fee only come under the purview of the service tax net.

CA Ashwani Agarwal

CA Ashwani Agarwal (Expert)
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16 July 2011 They have to fulfill the conditions required to make this transaction as a transaction done by a pure agent.

Check explanation 2 to rule 5(2) of Service Tax (Determination of Value) Rules, 2006), it has the requirements.

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Querist : Anonymous

Querist : Anonymous (Querist)

16 July 2011 sir we are billing as

Professionla fee XXX
Add: Reimbursment of MCA fee XXX
Total XXX

Now on what amount we have to raise invoice>...........

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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16 July 2011 I do not agree with any of the expert and I partly agree with Venkatraman.

To solve your problem get 2 separate Bills one for professional services and the second for payment made to MCA. Keep in mind that the MCA expenses bill is properly supported by the Challan paid by your C.A/C.S or any other agency.

If you take two bills then on Professional services you have to pay Service Tax and deducted TDS including Service Tax and on the expenses bill no Service Tax is payable and no TDS is to be deducged.

CA Ashwani Agarwal

CA Ashwani Agarwal (Expert)
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16 July 2011 Dear Mr. S S Agarwal, this is what the rule of pure agent also says.