Reverse calculation of service tax

This query is : Resolved

Ramachandra (Querist)
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09 May 2013 Dear all,

In case of a gross bill amount charged is 1200000/- & person entitle for abatement of 75%. How to reverse calculate the service tax liability by taking abatement?
Assume tax rate applicable for yr. is 10.3%
Pls. reply with steps?

CA Vikas Acharya

CA Vikas Acharya (Expert)
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09 May 2013 when abatement 75%
then tax on 25%
10.3% of 25% is 2.575%

now gross bill is inclusive of s.tax.
so divide 1200000 by 102.575 and multiply by 2.575, this will result into service tax

(1200000/102.575)x2.575 = 30124.30 service tax.
and value of service 1200000-30124.30 = 1169876.70

Ramachandra

Ramachandra (Querist)
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09 May 2013 Thank you very much Vikas:)

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