K.chandrasekaran (Partner) (210 Points)
02 July 2009My client is a small mutual fund canvassing agent whose commission receipts are well below Rs 10 laks per year but the mutual fund companies deduct the service tax in all payments to him & pays to central excise dept.My client being small assesse is also not liable to pay any income tax.
He is not able to claim them as refund though he is not liable to collect and pay service tax.Thus the mutual fund company does not pay any service tax out of its income.
Is this correct & fair?
Madhukar N Hiregange
(Chartered Accountant)
(39034 Points)
Replied 05 July 2009
The ST law has made the service recivers liable for payment of service tax. However these assesses are not eligible for the exemption of Rs. 10 Lakhs. It is legal and the reciver has to pay.
It is certainly not fair in my view to deny such people the exemption. This also ensures that crores of dealers/ small assessees are authomatically covered as even GTA has been made applicable to the consignor/ consignee. Making citizens break a lw which they do not even know exists.
CAclubindia
