Option No. 2 is Correct.
As per Service Tax Rules, Abatement is on the VALUE of TAXABLE SERVICE.
Kindly Answer at the Earliest
Page no : 2
Sunil Singh Thakur
(AAO)
(295 Points)
Replied 08 March 2011
well in case of abatement, the value of taxable service is to be reduced by abatement and then service tax is imposed on reduced figure. the above is done to exclude value of materials and other things on a conservative basis.
thus in the subject case, option B is the rightway to calculate the tax. Again, it is to be noted that in both the cases service tax liability remains same
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