Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

Service tax or value added tax

Shashidhara (Manager Finance) (29 Points)

21 September 2011

Any one Please Suggest me,

We were in Advertising Industry. We purchase vouchers (like big bazar vouchers by using of which someone could purchase from the Big Bazar), and we will hand over the same to our client. For doing the same we will charge our servic charge. so while doing the bill, whether we have to do the service tax bill for our service charges and for value of voucher sales Tax bill same or we have to do the Sales Tax bill (by considering the same as sale of Printed Material). What we thought that we will include our charges as profit on the sale of material and do the bill. Please suggest us whether we are correct.

Shashidhar

Reply
Follow
Share

3 Replies

surender (Manager Accounts) (149 Points)
Replied 22 September 2011

in my openion if you clubing the value of voucher in the clients bill then service tax is applicable. Other then service If you in the business of pucrchase and sale of voucher then sale tax applicable. Plese clrify in deatail you giving services to your clients or seprate sale?

Upgrade to CAclubindia Pro. Subscribe Now!

Shashidhara (Manager Finance) (29 Points)
Replied 27 September 2011

Thanks for your reply.

Even though we are the advertising agency, we are also having Sales Tax Registration, as we undertake the designing and selling of Brouchers, Prospectus etc. work. When we purchase the Big Bazar vouchers they wont charge us any sales Tax, they are telling that, only goods purchased from such vouchers are subject to Tax and not the voucher. But we are not puchasing the same for our sake but for the sake of our client, which they will distribute to their client.

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 28 September 2011

big bazar vouchers are like the bearer cheques, and it allows only money movement, not the goods, so the actual transaction is placed only when the goods are sold by big bazar, not at the time of "transfer of vouchers"

vouchers may lapse and can be re-issed subject to their terms and conditions, but tax would be charged only when the goods are sold ( against the voucher or cash as the case may be)

its business promotion expenses for your client, not the purchase, and for your turnover its mere transfer of vouchers

any commission you charge apart from the amount you have paid to BB, would be subject to service tax,