CA Chintan Vyas (Chartered Accountant) (116 Points)
22 March 2011I ask my question in form of below illustration.
A:- Service Receiver
B:-Service Provider
B provide service of commission. It charge and collect the amount from A since last 4 years
All of sudden B know that it is liable for service tax so it paid service tax on receipt of all last 4 year commission.
B send the challans to A to reimburse service tax paid by B of last 4 years.
Whether A can claim it as expenses or input service tax credit ??
U S Sharma
(glidor@gmail.com)
(21056 Points)
Replied 22 March 2011
| Originally posted by : CA Chintan Vyas | ||
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I ask my question in form of below illustration. A:- Service Receiver B:-Service Provider B provide service of commission. It charge and collect the amount from A since last 4 years All of sudden B know that it is liable for service tax so it paid service tax on receipt of all last 4 year commission. B send the challans to A to reimburse service tax paid by B of last 4 years. Whether A can claim it as expenses or input service tax credit ?? |
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B has freedom to get 1st lacs exemption on commission received. and spread over 4 years its 40 lacs, so we dont think that B has to charge for arear years.
B can pay the whole of service tax as per his own wish but can not claim from A for preceeding years,
A can not take credit of such commission based service tax , as it does not qualify for "input services"
CA.AMIT SHARMA
(SERVICE)
(188 Points)
Replied 23 March 2011
In my View , first of all B has to deposit the last four yaer Service Tax with Interest and If A reimburse the payment of service Tax to B then only he can take the Cenvat credit of service Tax.
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