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Accumulation of Service Tax

GBhura (Tax Consultant) (118 Points)

22 December 2007

Matter for Opinion on Service Tax –

Facts –

We are a Private Limited Company. The registered office & site office are at different places. We are constructing a IT park which is expected to be completed in 2 years. We are paying Professional/Technical services charges on which Service Tax is charged. We are also paying transport charges.

Query –

1. For how much time service tax on input services can be accumulated.

2. On completion of project we will be liable to charge service tax on offices Leased out. Whether we can set off accumulated service tax on input services paid now.

3. Whether we are liable to pay service tax on transport charges we pay to goods transport agency.

4. Whether we are liable to pay service tax if we pay transport charges to a lorry owner. What are the exemptions and what are the rate.

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(Guest)

You may wish to go for Centralised registration under Service tax. You can avail input service tax credit from the date of service tax registration. This credit could be used to set off the output service tax payable on letting of immovable property (lease rentals). As per Service tax laws, being a corporate entity if you pay frieght to goods transport operators then you would be required to pay Service tax on therir behalf. You can use your input service credit for payment of Service tax on GTA. Alternatively you could also pay the same by cash thro TR-6 challans which would involve cash flow.