Servic tax on amc

Ketan (Services ) (120 Points)

18 September 2014  

There is a query for calculating amount for Service tax. Kindly opine for the same…

As a part of business Service. We take AMC from clients @ 2000/- per machine… For every AMC taken, the parent company charges us 20% Royalty… thus my Revenue reduces by 400/- Thus what I get in hand is only 1600/- as a part of AMC… Now in this 1600/- that is my Gross AMC collection I have to provide the clients free spares worth Rs. 550/- which leaves only Rs. 1050/-

Now the question is the Serivce tax is applicable on 2000/- or 1600/- or 1050/- which is my actual income.. Would appreciate if you could clarify the same…

Thanking you in advance.

Ketan