Service Tax

This query is : Resolved

Saummay Singh (Querist)
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02 October 2009 Recently our transport contractor (we hire transport from them for the tour of our foriegn clients) billing us as per following example : -

Tour Package Cost = Rs. 60,000
Service Tax @ 4.12% Rs. 2472
Nett bill amount = Rs. 62472

Can we suggest our transporter to bill us as per follwing manner : -

Suppose they have a Margin on the total tpt cost is @ 10%

So they can bill us like :-
Hiring Charges 6000.00
(10 % of Rs. 60000)
Service Tax @ 4.12% = Rs. 247.00
Total bill amount = Rs. 6247.00
Charges of Fuel/Toll/Parking/State Taxes etc. = 54000.00
Gross Bill amount = Rs. 60247.00

The captioned suggestion means to avoid double taxation, as the transporters are already paying service tax on the fuel, parking, toll etc. then again they levy the service tax on their gross billing

Pls advice whether the above is in order.

Thanks in advance

SAIBAL

SAIBAL (Expert)
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02 October 2009 Dear Mr.Singh,

you can not suggest your transporter as you narrated.

Here i am giving u 2 examples both are not cosidered as double taxation.

example:1
When a manufacturer sell any goods 1st he has to pay c.Excise duty ,E,Cess & S& Hecess @8.24% on the value of the goods and sales tax [either VAT or CST] on the consolidated price.

example:2
In a case of testing & certification service one Engg has visited Kerala from kolkata where his to & fro air fare is Rs.20,000/= and service charge RS.4,000/= he has to charges S.Tax @10.30% on 24,000/= not on Rs.4,000/=.

I think over this 2 example it is clear to you that your contractor is rightly charged you 4.12%.

Saummay Singh

Saummay Singh (Querist)
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03 October 2009 Thanks Saibal.

Is there any one else who can suggest thier valuable opinion ??

Thanks in advance.

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SHIVRATAN SHARMA

SHIVRATAN SHARMA (Expert)
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03 October 2009 I am also agreed with Mr.Saibal's view.

Saummay Singh

Saummay Singh (Querist)
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05 October 2009 Dear Shivratan

Noted.

Thanks a lot