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Service Tax Calculation

Ramesh (Proprietor) (26 Points)

30 October 2008

Dear All

Just wanted to understand the Service Tax calculation.

I am a freelance consultant and have earned around 3 lakhs + 8.5 lakhs = 11.5 lakhs as consulting fee. All revenues have been received in this year.

I understand that there is a threshold of 10 L for service tax for this year.

How does service tax get calculated? Is it only calculated on 1.5 L (that which is over 10L) or on the whole of 10 L.

The first 3 L that I got was without service tax/.

IN addition, how do I get a service tax registration?

Regards

Ramesh

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10 Replies

Shyam Lal Naik (Service) (6156 Points)
Replied 30 October 2008

I assume that you have received only two payments of Rs. 3 Laks and 8.50 lakh.

You are liable to tax on 1.5 L only. 10 L is exempt.

You said that Rs. 3 L is without service tax. It follows that Rs. 8.s laks is wirh S tax. That means you have charged service tax on your client. in this situation, you have to pay service tax on 8.50 L. Service tax collected must be deposited with the central government, whether applicable or not.

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CA Abhash Mishra (Chartered Accountants) (598 Points)
Replied 30 October 2008

Originally posted by :Ramesh
"	Dear All Just wanted to understand the Service Tax calculation. I am a freelance consultant and have earned around 3 lakhs + 8.5 lakhs = 11.5 lakhs as consulting fee. All revenues have been received in this year. I understand that there is a threshold of 10 L for service tax for this year. How does service tax get calculated? Is it only calculated on 1.5 L (that which is over 10L) or on the whole of 10 L. The first 3 L that I got was without service tax/. IN addition, how do I get a service tax registration? Regards Ramesh	"

Regardsing service tax i will reply soon, and for service tax registration u have to fill st-1, with annexure-2 and attach the address proof of the firm and to be submitted in your reginal service tax department this the way to get service tax registration

Ramesh (Proprietor) (26 Points)
Replied 31 October 2008

Thanks a ton for your prompt responses.

My understanding of the responses thus far:

If I charge Service Tax to my client for 8.5L out of the 11.5L and deposit at the Central Govt, then from a Service Tax Department angle, I have only utilised 3L of the permissable limit of 10L, because I have already paid Service Tax for the 8.5L. Is that correct? Which means that I dont have to pay service tax for 3L? Of course, my assumption is that I cannot get a refund on the 7L additional service tax that I have paid :)

A couple of queries:

1. From an income tax perspective, would my income be 11.5L + Service tax on 8.5L or just 11.5 L?

2. Where should the ST-1 be submitted and how much time does it take for the same?

3. Given that I want to bill my client now (like yesterday), and the client is insisting on a Service Tax registation number, is there a provisional number that is given for the time being by the Service tax department when I do submit the ST-1 form?

Regards

Ramesh

BRIJMOHAN (PRIVATE JOB) (20 Points)
Replied 01 November 2008

Originally posted by :Ramesh
"	Dear All Just wanted to understand the Service Tax calculation. I am a freelance consultant and have earned around 3 lakhs + 8.5 lakhs = 11.5 lakhs as consulting fee. All revenues have been received in this year. I understand that there is a threshold of 10 L for service tax for this year. How does service tax get calculated? Is it only calculated on 1.5 L (that which is over 10L) or on the whole of 10 L. The first 3 L that I got was without service tax/. IN addition, how do I get a service tax registration? Regards Ramesh	"

BRIJMOHAN (PRIVATE JOB) (20 Points)
Replied 01 November 2008

Originally posted by :Ramesh
"	Dear All Just wanted to understand the Service Tax calculation. I am a freelance consultant and have earned around 3 lakhs + 8.5 lakhs = 11.5 lakhs as consulting fee. All revenues have been received in this year. I understand that there is a threshold of 10 L for service tax for this year. How does service tax get calculated? Is it only calculated on 1.5 L (that which is over 10L) or on the whole of 10 L. The first 3 L that I got was without service tax/. IN addition, how do I get a service tax registration? Regards Ramesh	"

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BRIJMOHAN (PRIVATE JOB) (20 Points)
Replied 01 November 2008

Originally posted by :Guest
"	Originally posted by :Ramesh " Dear All Just wanted to understand the Service Tax calculation. I am a freelance consultant and have earned around 3 lakhs + 8.5 lakhs = 11.5 lakhs as consulting fee. All revenues have been received in this year. I understand that there is a threshold of 10 L for service tax for this year. How does service tax get calculated? Is it only calculated on 1.5 L (that which is over 10L) or on the whole of 10 L. The first 3 L that I got was without service tax/. IN addition, how do I get a service tax registration? Regards Ramesh "	"

Rohit (service) (22 Points)
Replied 01 November 2008

Originally posted by :Shyam Lal Naik
"	I assume that you have received only two payments of Rs. 3 Laks and 8.50 lakh. You are liable to tax on 1.5 L only. 10 L is exempt. You said that Rs. 3 L is without service tax. It follows that Rs. 8.s laks is wirh S tax. That means you have charged service tax on your client. in this situation, you have to pay service tax on 8.50 L. Service tax collected must be deposited with the central government, whether applicable or not.	"

Rohit (service) (22 Points)
Replied 01 November 2008

Originally posted by :Guest
"	Originally posted by :Shyam Lal Naik " I assume that you have received only two payments of Rs. 3 Laks and 8.50 lakh. You are liable to tax on 1.5 L only. 10 L is exempt. You said that Rs. 3 L is without service tax. It follows that Rs. 8.s laks is wirh S tax. That means you have charged service tax on your client. in this situation, you have to pay service tax on 8.50 L. Service tax collected must be deposited with the central government, whether applicable or not. "	"

(Guest)

Why dont u use the ask the expert/ discussion board on www.servicetaxdelhi.gov.in. They are good and responsive. And usually straight and direct. 99% accurate.

They helped me out with a lot of my queries