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Service tax query

Aditya (Student) (61 Points)

23 November 2015

If invoiced was raised at 12 % and services provided and payment received were after 14% became applicable, can amt received be treated as price cum duty? Eg invoice =100+12service tax Amt recived =112 Can service tax be calculated as (112/114) *14%?

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2 Replies

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 23 November 2015

In normal business no customer or client would pay the service provider the diffrential tax of 1.64% even of SP raised a debit note for the difference.

If in the contract the rate was forzen ( rule 6 (3) @ 12.36% then the SP would have to pay 14% on 112.36/ 114.

Since the value is not renegotiated it would be required that if not collecting form the receiver the SP would have to pay 14% after issuing a debit note for 1.64%.

Note: Pl note present rate with SBC is 14.5%.