03 June 2009
One of our service provider was unregistered upto Dec08 being turnover below 10 lacs. In Jan09 he crossed the expemption limit, so got a ST Registration. Now he is charging us for service tax from the date of registration.
He is also requesting us to pay the service tax amount before the period of his service tax registration stating that he is liable to pay service tax on first 10 lacs also.
My query is: Is he correctly quoted ? Can we reimbure him service tax, if yes, what is the procedure, means what document we need to have from him ? Can we take cenvat credit on such reimbursement (specially before the date of his registration)?
Please advice referring the rules and notifications in this regard.
03 June 2009
If it is a fact that he was unregistered because he was within the threshold limit of Rs 10 lakhs upto Dec 08, then how come his liability arrises now for the previous period i.e, before Dec 08.
Whether there was any clause about service payment in the contract between you and your service provider? Pl give details.
04 June 2009
whether part or whole of the services under contract no 1 & 2 were provided after Jan 09? If yes, then he is required to charge service tax proportionately on the value of the services provided after Jan 09 i.e., after he took registration .
Also get clarification from your provider how his service tax liability arose for the period prior to his registration, because as you said he was availing value based exemption of 10 lakh.
CAclubindia
