K.GANESH KARTHI (I.T.ASSISTANT) (54 Points)
05 January 2011
Hello,
Can a courier franchisee setoff the service tax paid by him to his franchisor against the service tax collected by him from customers vide courier bill? If so whether there is any limit and also kindly let me know how to state that in the ST3 form. Thanks for all those who replies!
k.ganeshkarthi
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 05 January 2011
CA Shilpi Jain
(Indirect taxation)
(155 Points)
Replied 05 January 2011
The franchise service is an input service for your courier service? If yes then you can avail and utilise the same. It should be noted that in case the input service is used for providing only taxable service then full credit can be taken
Else if it is used for providing both taxable and non taxable then only proportionate credit available.
If used for non taxable services then no credit available.
There is specific section in the returns for disclosing the CENVAT credit details where the availment and utilisation can be mentioned
K.GANESH KARTHI
(I.T.ASSISTANT)
(54 Points)
Replied 06 January 2011
Hello shilpi,
As told by you, the courier franchisee collects 'Service tax' vide service charges. The materials are despatched through franchisor network and they charges this franchisee service charge alongwith their service tax (input service). I think your earlier reply is fine. Also let me know in form ST3 in which column this input service has to be shown for setoff. Thanks!
CAclubindia
