service tax or tax under PGBP?

This query is : Resolved

Rahul (Querist)
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17 April 2017 If a person is engaged in running gym then please help me in letting me know whether he would be liable for ST or PGBP?

CA Shubhanshu Jain

CA Shubhanshu Jain (Expert)
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19 April 2017 He would be liable for both as both are different, as service tax is indirect tax and income tax is direct tax

Now first let us understand what is difference between direct tax and indirect tax
- Direct Tax is the one which is levied directly on the income of the person for eg : - Income tax, Wealth Tax
- Indirect tax is the tax which is imposed on goods and services i.e person manufacturing/selling goods or supplying services collects tax from person purchasing from him or availing services from him and deposit same with government. Examples of indirect taxes are service tax, VAT, Excise duty

Since person running GYM is providing services to his clients hence service tax is to be charged on fees taken from users and deposit same with government, However if such person has taken some services on which he has also paid service tax then he can claim benefit of same. For eg: Person running GYM collect fees of Rs. 12,00,000 on which service tax liability is lets suppose Rs. 2,00,000 and running GYM he has taken few services on which he has paid service tax of Rs. 40,000 so net tax Payable to government is Rs. 1,60,000 (200000-40000)

And as far as PGBP is concerned which is income tax so this is to be paid as per provisions of income tax Act.

Rahul

Rahul (Querist)
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21 April 2017 Thanks Shubanshu, however, as far as Service tax is concerned then one of my friend Peter already said "if total amount of service is less than 10lac then ST will not be applicable". Please take a look at this..

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CA Shubhanshu Jain

CA Shubhanshu Jain (Expert)
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21 April 2017 Yes if services provided by you is less than 10 lakhs in previous year then service tax is not levied