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Service Tax on AMC

Manish Gupta (Service) (17 Points)

11 March 2010

I am working as Manager Finance in a PSU. We have various works awarded to various contrators. One of the repair and maintenance contract has been awarded to a party as inclusive of service tax. The party is not registered under Service Tax. The Services are taxable under Service Tax. Our Service tax payment are centraly made at Head quarters at New Delhi and we are a unit at a different location.

1.The problem is if we make the deduction of Service Tax from the bill of the party how would we be able to take credit ?

2. What would be the status of the party?

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9 Replies

Ram Avtar Singh (Nagari Sultanpur U.P.Delhi) (14487 Points)
Replied 11 March 2010

service tax exemption limit up to 10 lakh. no need to charged service tax up to limit.

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ACMA Obulirajan R (M.Com, ACMA) (1119 Points)
Replied 11 March 2010

When the party has not claimed service tax in his bill then where is the question of recovering service tax from him.

The reason for not claim ---> coz he may be exempted for claiming service tax....

Hence you no need to bother if the contractor has not claimed service tax in his bill

Thanks,

Obulirajan R

praveen (Chartered Accountant) (6971 Points)
Replied 11 March 2010

if he is not registered under service tax then he will not charge service tax right ...

then where will the question of input raise.

and is it mentioned any where in the bill that it is inclusive of service tax, because one can claim input only if it mentioned in the bill and there is a valid service tax registration number.

sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 11 March 2010

You have awarded a contract to a vendor inclusive of service tax

If the vendor is exempted from service Tax Registration there is no question of deduction from the party nor you could claim input tax credit

CA Priya (CS Final) (1049 Points)
Replied 11 March 2010

Hey....If he is not a registered dealer then he cannot charge service tax in his invoice na........ If he charges the tax then he will be providing his Service tax registration number which means he is a registered dealer......... So u can take input only when the service provider has mentioned Service tax Reg no in turn remitts the same to the govt..... The logic is simple...... The Govt will give u input only for the amount which it has already received....... Cheeeers.......

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darshita (artilce student) (72 Points)
Replied 11 March 2010

hello manish,

why r u worrying about the service tax bcoz u hav to pay wat he has chgd to u,if he has not chgd the S.T,then either is services has not crossed 10lakhs or he may be exempted from payment of service tax. or else u can ask that party about their reg status as per s.t. act.

darshi