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Service tax applicability

nitin suvarna (C.A FINAL) (828 Points)

17 January 2012

hi,

i had earlier posted regarding this query ie. service tax applicability on transport of goods through waterways.As regarding its solution service tax needs to be deducted on such transport charges if service is delivered within ports in india. My query here is if the assessee fails to collect S.T knowingly or unknowingly, what are its consequences & what are the hardships a client may face for this??Also whether there is any kind of loophole where one may try to escape the consequences for it.

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U S Sharma (glidor@gmail.com) (21063 Points)
Replied 17 January 2012

Originally posted by : nitin suvarna
	hi, i had earlier posted regarding this query ie. service tax applicability on transport of goods through waterways.As regarding its solution service tax needs to be deducted on such transport charges if service is delivered within ports in india. My query here is if the assessee fails to collect S.T knowingly or unknowingly, what are its consequences & what are the hardships a client may face for this??Also whether there is any kind of loophole where one may try to escape the consequences for it.

1st of all you must be clear that service tax is not a deductible tax, it can be either paid or exempted, but in no case it can be deducted.

2nd . the service provider may have been availing exemption of 10Lacs,

3rd, the liability of service tax in case of transport of goods through waterways laid with service provider, and the service receipent is not liable to pay service tax on it, irrespective of fact that service tax is charged by service provider or not, ( in case of GTA the same is payable by receipent, if the ST is not charged by GTA)

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nitin suvarna (C.A FINAL) (828 Points)
Replied 18 January 2012

dear sir,

i agree that service tax needs to be collected & not deducted. Secondly the client is not a small service provider to claim exemption & the client in this case didnt collect service tax for such of the services delivered within indian waterways .my query regarding this is whether the client can escape its obligation & whether there can be consequences for not doing so.

SURENDRA (JOB) (70 Points)
Replied 18 January 2012

"2nd . the service provider may have been availing exemption of 10Lacs" is it mean that a service provider can received a gross amount as incoem upto 10 lac without paying any service tax on that receipt amount ?

is a service provider not compulsery to register with service tax department upto receiving 10 lac gross amount ?

plz help

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 18 January 2012

Originally posted by : SURENDRA
	"2nd . the service provider may have been availing exemption of 10Lacs" is it mean that a service provider can received a gross amount as incoem upto 10 lac without paying any service tax on that receipt amount ? is a service provider not compulsery to register with service tax department upto receiving 10 lac gross amount ? plz help

upto 9 lacs of service receipts, no registration,

after 10 lacs - collection and payment of service tax

refer notification no 6/2005 ST as amended by 8/2008 ST

SURENDRA (JOB) (70 Points)
Replied 18 January 2012

thanks dear sir

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nitin suvarna (C.A FINAL) (828 Points)
Replied 19 January 2012

dear sharmaji,

could me reply me back,please........

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 19 January 2012

Originally posted by : nitin suvarna
	dear sir, i agree that service tax needs to be collected & not deducted. Secondly the client is not a small service provider to claim exemption & the client in this case didnt collect service tax for such of the services delivered within indian waterways .my query regarding this is whether the client can escape its obligation & whether there can be consequences for not doing so.

unless the facts are not clear of the transaction and status of the service provider, reply is not possible,

escape of such things is purely evasion, check the things , that payment is made in indian rupees or not, if done in forex then it may get benefit of doubt for export of services,