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Service tax invoice issue

Shweta Garg (CA FINAL Executive(Payables)) (147 Points)

04 July 2012

Hi All,

Suppose, my services are covered under 60% abatement. I rendered services worth Rs.1,00,000/-. For what value the invoice would be raised?

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11 Replies

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 04 July 2012

The invoice will be raised worth Rs 1,00,000/- plus service tax @ 12.36 on Rs 40,000/-.

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Shweta Garg (CA FINAL Executive(Payables)) (147 Points)
Replied 04 July 2012

Now suppose, I took someone's services which are covered under 60% abatement. and the party raised the invoice as said above.

if the party's account in Tally.ERP 9 is service tax affected, then how the entry would be passed?

Shweta Garg (CA FINAL Executive(Payables)) (147 Points)
Replied 04 July 2012

Originally posted by : Ajit kumar Dubey
	The invoice will be raised worth Rs 1,00,000/- plus service tax @ 12.36 on Rs 40,000/-.

I should mention the abatement value in the invoice.

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 04 July 2012

Though not necessary, but for the purpose of better understanding you can do so.

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 13 July 2012

Please mention the abatement value like this:

Services value Rs. 1,00,000.00

Add Service tax @ 4.944% Rs. 4,944.00

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Total Rs.1,04,944.00

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Most of the rent-a-cab service providers and abatement availed service providers charge the net rate i.e after availing the abatement.

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Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 13 July 2012

Sorry to say sir RENGARAJ R.K, but as there is no such rate of 4.944% of service tax it is always advisable to show abatement seperetly from the basic value and then charge service tax on the net value after abatement at full rate of 12.36%. If we do so it will be more transparent, meaningful and easier to understand.