Pawan K Gour (Asst. Manager) (45 Points)
09 February 2015On what amount Service Tax is to be paid?
Suppose A Company Paid as under mention as Commission Income
Commission Earned by Vendor/Business Partner : 100
Less : TDS @ 10% : 10
Net Paid to CP : 90
Now on What Amount Service Tax Reimbursement should be paid by Company To Vendor/Business Partner
Roshan Thomas
(C.E.O )
(356 Points)
Replied 09 February 2015
Sandeep Jadhav
(Bcom ITP STP ITRPS STRPS CS CA FINAL)
(1092 Points)
Replied 09 February 2015
@ roshan & @ pawan
Service tax is paid on Basic Amount that is on 100 if you are not collected tax seprately then make reversed calculation of the same to get Service tax amount ..
In Above Situation you are not Collected Service tax seperately then you have to make reversed calculation to get service tax amount, As per service tax Rules Liability still has to be pay if it is not collected from party.
If Commission Amount Is Rs.100 and net paid to party is Rs.90 after deducting TDS Rs.10 (As per new notification TDS should be duducted on Value before tax.)
So you have to calculate service tax amount on Rs. 100 calculation as per below
Basic Value Rs. 89.00
Service Tax Rs. 11.00
Total Rs. 100
TDS @ 10% on Rs. 89 that is Rs. 9 so net payment will be Rs. 91.... ok i think you will be understand all queries.
Arif Ali
(Apt Co Advisory)
(1230 Points)
Replied 09 February 2015
| Originally posted by : Pawan K Gour | ||
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On what amount Service Tax is to be paid? Suppose A Company Paid as under mention as Commission Income Commission Earned by Vendor/Business Partner : 100 Less : TDS @ 10% : 10 Net Paid to CP : 90 Now on What Amount Service Tax Reimbursement should be paid by Company To Vendor/Business Partner |
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Hi Pawan,
Here vendor company's charges is 100 and it will charge service tax on 100. and now your company will pay the amount after dedcution of TDS on 100 only.
So your company will reimburse the service tax on 100 to vendor/business partner.
Dharmesh
(C.A.)
(47 Points)
Replied 17 February 2015
Dear Mr.Gaur,
In my opinion the service tax liability can be determine from the substance of the contract and can be concluded as below.
1) If contract for commission specifically provide for commission including all taxes than what Mr.Jadhav has advise would hold good.
2) However, If Contract specify for taxes above commission than advise of Mr.Thomad will hold good and you have to raise Debit note on client for recovery of service tax.
Hope this will clerify you.
Sandeep Jadhav
(Bcom ITP STP ITRPS STRPS CS CA FINAL)
(1092 Points)
Replied 17 February 2015
Dear Mr. dharmesh,
As per Service tax Rules and regulation service tax should be charged on every taxable service if it is come in Reversed Service tax mechnasim then the liability will be divided and some portion should be paid by receiver and provider............................ service tax must be paid on every taxable service even it is not collected from service provider...... then liability transfer to service receiver......................... simple.... ok
CAclubindia
