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Service tax

tejesh (MANAGER ACCOUNTS) (43 Points)

23 August 2012

Hello, A bill for Works contract was raised inclusive of Service tax.Only 90% of bill value has been paid by the client,thereby keeping 10% as retention money.Now the doubt is on what amount do we have to deposit Service tax ie: 90% or the 100%.will the service tax on retention amount be paid when we receive the amount.plz do inform if there is any circular or notification or any case law for this.

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7 Replies

ambrish (Student) (24 Points)
Replied 23 August 2012

Hi Mr. Tejesh,

You have to Deposit service tax should be 100% if invoice value is 100% billing .

service tax is based on type services.

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shivani (consultant) (122 Points)
Replied 23 August 2012

Pl inform client to pay service tax on full and let him avail input credit.

Or else bill only 90% charge accordingly --Retention amount bill after certain period

Rahul (Manager) (45 Points)
Replied 23 August 2012

10% Retention amount is related to Basic amount. It has nothing to do with taxes. Even if the service is non taxable then also receiver may retain the 10% amount according to the PO clause. Hence both issues should be treated as different. Tax should be paid totally.

Ravi Shankar Dubey (zindagi ek sangharsh) (100 Points)
Replied 23 August 2012

SERVICE TAX RAISED ON BILL 100% AMOUNT NOT 90% .

CA. ROHIT GUPTA (Service) (133 Points)
Replied 23 August 2012

It will depend on whether the service provider and service receiver are individual/HUF/Firm or Company, etc. It service provider is individual/HUF/Firm and service receiver is company, then in that case it is the liability of both service provider and service receiver to deposit 50% each of servic etax to the CG vide Notification no 30/2012 ST dated 20.06.2012.

In case, you are company service provider then in that case service tax is to be paid on 100% amount.

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Smruti (CA) (183 Points)
Replied 23 August 2012

Hello.. can anyone tell me the circular no regarding reverse charge of service tax (recent ammendment)

Prashant V (Accounts Officer) (21 Points)
Replied 24 August 2012

Recent Changes in Service tax vide notification no. 25/2012, 26/2012 & 30/2012 dt 20-06-2012 and its impact on the Company.

Sl No.	Nature of services	% of Abatement	% of the value of taxable service	Conditions for availing the abatement	% of ST payable by the person providing service	% of ST payable by the person receiving service	Exempted Items	Whether CENVAT Credit is Available?
1	Services in relation to transportation of goods by rail	70	30	No condition has been notified	100	NIL	Petroleum Products as mentioned under Chapter heading 2710 and 2711, Salt Agricultural produce and Chemical Fertilizers.	Credit is available only when for inward transportation and transportation upto the place of removal for services used directly in relation to dutiable product which are chargeable to full rate of Excise duty.
2	Services of goods transport agency in relation to transportation of goods by road (GTA SERVICE)	75	25	CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken *by the service provider* under the provisions of the CENVAT Credit Rules, 2004. To affect the same a deceleration should be taken on the Transporter’s bill from the GTA.	NIL	100	Pulses and agricultural produce	Credit is available only when for inward transportation and transportation upto the place of removal for services used directly in relation to dutiable product which are chargeable to full rate of Excise duty.
3	Services in relation to transportation of goods in a vessel. Transportation of Imported materials by a vessel is not liable to Service Tax	50	50	CENVAT credit on inputs, capital goods and input services, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004	100	NIL	Petroleum Products as mentioned under Chapter heading 2710 and 2711, Salt Agricultural produce and Chemical Fertilizers	Credit is available only for services used directly in relation to dutiable product which are chargeable to full rate of Excise duty.

Sl No.	Nature of services	% of Abatement	% of the value of taxable service	Conditions for availing the abatement	% of ST payable by the person providing service	% of ST payable by the person receiving service	Exempted Items	Whether CENVAT Credit is Available?
4	Renting of any motor vehicle designed to carry *passengers*.	(i) 60 (ii) NIL	(i) 40 (ii) 100	Same as above. Nil	- 60	100 40	No exemption has been provided	No Credit will be available.
5	Services provided or agreed to be provided by an arbitral tribunal	NIL	100	No condition has been notified	NIL	100	No exemption has been provided	The Company can avail the Credit after paying the Service Tax, provided that the service has been used directly in relation to dutiable product which are chargeable to full rate of Excise duty
6	Services provided or agreed to be provided by individual advocate or a firm of advocates by way of legal services	NIL	100	No condition has been notified	NIL	100	No exemption has been provided	Same as point no. 5
7	Services provided or agreed to be provided by way of supply of manpower	NIL	100	No condition has been notified	25	75	No exemption has been provided	Same as point no. 5
8	Services provided or agreed to be provided by way of execution of Works Contract (where both material and labour are involved)	NIL	100	No condition has been notified	1) Other than limited companies 50 2) For limited companies 100	50 NIL	Mentioned in the presentation	Same as point no. 5

Sl No.	Nature of services	% of Abatement	% of the value of taxable service	Conditions for availing the abatement	% of ST payable by the person providing service	% of ST payable by the person receiving service	Exempted Items	Whether CENVAT Credit is Available?
9	Services provided or agreed to be provided by way of Repair & Maintenance (where only labour is involved)	NIL	100	No condition has been notified	100	NIL	No exemption has been provided	Same as point no. 5
10	Services provided or agreed to be provided by Government or Local Authority except services in relation to Renting of Immoveable property, services by the Department of Posts by way of speed post, express parcel post, life insurance and agency services, services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport, and transport of goods or passengers	NIL	100	No condition has been notified	NIL	100	No exemption has been provided	Same as point no. 5
11	Services provided or agreed to be provided by way of transportation of goods by Inland Waterways (covered under the Negative List)	100	NIL	Provided that the Customs Authority has certified the route as “*Inland Waterways*” for the passage used by the vessel in transportation of any goods.	NIL	NIL	Applicable for all goods	Exempt under Service tax.