Service Tax on Penalty charged to service provider
This query is : Resolved
17 December 2010
When service provider i.e. contractor fails to comply with conditions of work order assigned to him, company deducts penalty from its bill amount as per agreed terms. Whether this penalty amount should be reduced from expenses or credited to Misc. Income while accounting? whether ST is payable if this is credited to Misc. Income.?
17 December 2010
In my view, the amount should go to reduce the expense. Because, the net amount is payable as per the terms of the condition of the contract.
If at all it is treated as Misc. income, ST is not payable. The reason being, this is not a receipt against any service rendered.
If at all it is treated as Misc. income, ST is not payable. The reason being, this is not a receipt against any service rendered.
Message likes :
1 times
17 December 2010
Invoice is not provided for net amount, it is provided without deducting penalty amount...so CENVAT credit is also availed on full amount.
17 December 2010
For availment of Cenvat Credit, the amount mentioned in the invoice is not at all relevant.
Cenvat is availed on payment basis. The net amount paid by you shall be treated as cum-tax and Cenvat calculated accordingly.
In fact, the CBEC has clarified that, in case of deduction of service providers bill, the bill shall stand modified to that extent.
Cenvat is availed on payment basis. The net amount paid by you shall be treated as cum-tax and Cenvat calculated accordingly.
In fact, the CBEC has clarified that, in case of deduction of service providers bill, the bill shall stand modified to that extent.
17 December 2010
That is only for when bill amount is reduced due to short service provided...in this case service is fully provided but only penalty is charged due to not fulfilment of contract clause say..contractor has not submitted PF challan or ST Certificate as per contract. than...
17 December 2010
LD has to be shown as misc. income . Service tax is paid on invoice amount. there is no relation between service tax and LD charges.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- REGARDING GST ON COMMERICIAL PROPERTY
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- GST on export of services and Input Credit
- ITC temporary reversal and reclaim
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- TDS U/S. 194NF
- Applicable TDS rate for sale of property in Nov 2024
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- Payment of bonus act - notice pay recovery
- MIS MATCH OF INVOICE NUMBER
- GST Regis.
- ITC c/f from FY2022-23 to FY2023-24 entered the same in table 8C of GSTR9 of FY 2022-23, in FY23-24
- Late filling fees Demand by gst office
- IGST Credit-Show cause notice issued-confusion
- Short and Excess provision of expenses
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
Trending Online Classes
CAclubindia
