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Service tax rebate

Arun Kumar (Design Engineer) (25 Points)

27 January 2016

Dear Team,

I am paying the service tax first time and I got little confused with the following scenario:
I provided service to my customer of say 1L, and sent the invoice mentioning 14.5% Service tax. Total invoice value is 1.145L now after adding the ST.

Client deducted the 10% TDS and paid me amount. I am able to see the TDS in my linked corporate PAN account number online.

Yesterday I paid the service tax 14.5% service tax to Govt, but later I came to know, companies having turnover less than 10L need not to pay the same.

As my total income from customer is 1 L, so should I pay 14.5% to govt of India.

If I shouldn't then what is the procesdure to claim the same?

Please guide.
Regards
Arun

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3 Replies

Mir Irshad Ali (Partner) (192 Points)
Replied 27 January 2016

Since you have opted not to avail the exemption under Notfn No. 33/2012-ST, and you have charged and collected Service Tax from the customer, the service tax paid by you is correct and legal.

As per the provisions of Notfn No. 33/2012-ST

"the provider of taxable service has the option not to avail the exemption contained in this notification and pay service tax on the taxable services provided by him and such option, once exercised in a financial year, shall not be withdrawn during the remaining part of such financial year;"

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Arun Kumar (Design Engineer) (25 Points)
Replied 27 January 2016

Thanks for the reply Dear Mir.

But they have deducted the 10% TDS before paying the invoice to me. Ultimately, Means I raised 1L+14.5%, and I got 1L+4.5%, then I paid 14.5% Serive tax to Govt out of 1L+4.5%.

My earning is 1L-10%

Please help if above is right

Mir Irshad Ali (Partner) (192 Points)
Replied 28 January 2016

The TDS of 10% deducted by your Customer is on account of Income Tax and same will be either adjusted by the Incom Tax authorities against your Income Tax liability or refund to you.