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Regarding service tax

venkat (Others) (24 Points)

18 October 2012

Hi,

I work for a foreign company from india (work from home) but the salary is credited in INR through another indian company. They are treating me as a consultant to thier company and charges me for the salary processing which they convert to INR on monthly basis. My salary execeeds 10 L/Annum. I have filed my income tax in india. Now the company who process my salary is asking me to raise invoice with service tax and they are saying, I need to register with Service tax department and pay tax.

It will be really helpful if someone could explain whether service tax is applicable for my situation. If I need to pay service tax should I have to pay it for the complete earning or for the amount which execeeds the 10 Lakh. If I need to pay the service tax then what will be the percentage of tax.

Thanks,

Venkat

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4 Replies

(Guest)

Firstly,

Be clear with one thing. Are you an employee or consultant?? What are terms and conditions of joining??

If you joined there as a consultant. Yes, you have to register with ST dept.

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Ashish M (Chartered Accountant) (2731 Points)
Replied 18 October 2012

Hi,

Every service except the service given in the Negative list issued by central govt. is chargeable to service tax. Since they are treating you as consultant and naming the fixed payment per month as a salary. Its actually a consultancy Fees.

Yes, you have to charge service tax if your gross reciepts during the year from all your clients exceeds Rs. 10 lacs. Remember, in the first year, only any reciept in excess of Rs. 10 lacs will be liable to service tax. Upto Rs. 10 L, there is no liability of charging service tax.

TDS will be what you client will deduct from the payment.

______________________________________________________________________

- Ashish M

(8802999731)

Ashish M (Chartered Accountant) (2731 Points)
Replied 18 October 2012

Hi,

TDS will be what you client will deduct from the payment.

______________________________________________________________________

- Ashish M

(8802999731)

Sonu Kumar (Account Manager) (665 Points)
Replied 19 October 2012

Dear Mr. Venkat.....

1st Clear your term and Condition of Employement. if You are Employee of the Company then you need not to Pay Service tax because a employee not comes under the ambit of service tax..