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is service tax applicable.?

Saroj Rana (MBA Finance) (417 Points)

03 January 2008

Is receiver of services will pay the tax.........?

For example:
My co. receives counseltig services from a co.
   The amount is Rs.1.25.000
    & service tax @ 12.36=15,450 so the total is Rs.1,40,450
My question is how much i have to pay to the co. who is providing services and
   how much to the Govt.

Plz give me the solution, I m very much confused

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10 Replies

(Guest)

The service tax is levied on the supplier of the service and not the reciever. However, the supplier of the service recovers it from the customer. In ur case you have to pay to the co. Rs 140450. You need not pay anything to the government. The supplier is liable to pay to the government and hence he would do so.

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(Guest)

As your co is receiving the service form the consultant .. U need not to pay to government the amount of tax .. But U will have to pay to the service provider te full amount and then U will be eligible to take credit of the amount of tax paid... your liablility to pay tax will only arise when your co will provide service to others. I think U need to understand the concept thoroughly.

Saroj Rana (MBA Finance) (417 Points)
Replied 03 January 2008

Thanks a lot But one more thing i want to know, After paying the bills, should my Co. is liable for TDS if any,if so then how much will be the %.

santhosh (Accountant) (37 Points)
Replied 04 January 2008

u want payto the company RS.140250/- and to the govet RS.15450/-

santhosh (Accountant) (37 Points)
Replied 04 January 2008

if u r company is having TAN no. deducted tax and pay to the custamer at what rate it is applicable

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shyam kishor porwal (Chartered Accountant) (183 Points)
Replied 04 January 2008

Dear Mr. Rana, It seems that you are receiving consultancy services from professional. deduct TDS on Rs. 140450/- @ 10% +Sc+Ec.

Saroj Rana (MBA Finance) (417 Points)
Replied 04 January 2008

Dear Mr. Shyam Tks for the solution Could u give me some additional information regarding TDS means, u said that I have to deduct the TDS @ 10.30% but there is another % is available i.e 11.33% for domestic company's, So'how can I detect the percentage and how can i know that the co.'s annual turn over is exeeding 1crore. Plz give me reply I also want replies from other members too.

suman nvss y (article assitant) (147 Points)
Replied 04 January 2008

under service tax law, liability arises only in the hands of "SERVICE PROVIDER" BUT NOT "SERVICE RECEIVER" YOU NEED NOT TO PAY ANY SERVICE TAX TO AUTHORITES

(Guest)

Dear All, Can anybody tell me what is the major difference if i shift one of my party from consignment mode & outright billing. B'cause i am being charged Service tax of which i am not getting any credit. Can anyboby please highlight what will be pros & con of shifting my party from consignment to sale or return basis. Regards Rahim Mardhani 09324143732.

(Guest)

u need to pay 140050 to the company who is providing the consultating servises to you. that is whole amount i.e. cost + serivice tax the company providing the servises is laible in your case to deposit the service tax amount with the govt. if you r providing any taxable output services or excisable goods then you can claim the creidt of the service tax paid to the consulting firm