Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Input credit on service tax

JAYANTA (Accountant) (97 Points)

18 July 2014

Sir, We are a Professional & Consultancy Firm.We are providing designs.We issued our invoices to our customer with 12.36% ST. In our business we required lot of traveling .On travelling bill the service provider ( Travel Agents mainly Air tkt purpose ) are raising their bill with ST @ 12.36%. Now my question is should I take input credit @ 12.36% and compute output less input @ 12.36% . Please help me out.

Read more at: /forum/input-credit-on-service-tax-298553.asp#.U8ipffmSzzM

Reply
Follow
Share

4 Replies

Harendra Kumar (Tax Advisor ) (1326 Points)
Replied 18 July 2014

Sir,

In this reagrd you recd. taxablew services under RCM and you have to pay service tax on such service on partial or hole basis.

on abate value your liability @ 40 % on total taxable value on (Receipaint).

non abate value provider 60% and recepaint @ 40%.

In any case receipaint liability only 40%, and

service provided raised excess duty on your end so plz discussed with such service provider.

Upgrade to CAclubindia Pro. Subscribe Now!

JAYANTA (Accountant) (97 Points)
Replied 19 July 2014

Sir,

Thanks for your guidance.

But it is not clear to me sir. What I am doing not say example :-

Basic Output

1000 124

300 37 ( Input)

I am depositing ST 87/- is it correct ? or I have to calculated like that (124-15).Pls guide me

Jayanta

Harendra Kumar (Tax Advisor ) (1326 Points)
Replied 19 July 2014

In this regard both tax i.e. input or output tax is @ 12.36%. But I am saying that such services liability in recipient 40% only.

E.G.

You will be recd. such service i.e. Rent-a-cab Rs. 100. Then your liability will be raised under RCM, 40% only i.e. Rs. 40 @ 12.36=4.944% only not more excess or not more less then.

Thanking you,

1 Like

Venkatanarayana GM (Partner associate at Hiregange & Associates) (1279 Points)
Replied 19 July 2014

Dear sir,

Yes. Definitely you can avail such input service credit to pay output service tax. Because, you incur such expenses for providing output service. Hence it is clear that, this expense is incurred for official purpose, it qualifies as input service credit.

Thanks