Servicetax on event managment agency

This query is : Resolved

CA Sanjay D Shirguppe (Querist)
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01 December 2012 my client organises event for his client he incurres the expendiure on behalf client whereas client pays him gross amount inclusive of his profit margin .his profit margin is at 10% on the expenses incurred on behalf client to orgnise the event client is not paying any service tax to him on what value he should pay servicetax to govt ? what is value for claiming exemption limit is it net value or gross value. please clarify? whether can he pay service tax only on commission amount or profit margin like advertising agency

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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04 December 2012 1. Service tax is levied only on the service charges. Service tax is NOT levied on reimbursement of expenses.

2. If service tax is not paid separately by the client, then the amount received shall be deemed to include the amount of service tax.

Service tax = Amount*12.36/112.36