I have a query with regard to Union Budget 2008 changes.

The explanation to sec.67 has been amended to include the following:

(7b) "associated enterprise" has the meaning assigned to it in section 92A of the Incometax Act, 1961;

(c) "gross amount charged" includes payment by cheque, credit card, deduction from
account and any form of payment by issue of credit notes or debit notes and book adjustment, and any amount credited or debited, as the case may be, to any account, whether called “Suspense account” or by any other name, in the books of account of a person liable to pay service tax, where the transaction of taxable service is with any associated enterprise.’

In view of the above change, let us consider a scenario. I am a service provider. I provide services to A (related party) and B (not a related party). I send an invoice for services rendered to both A and B. The invoice is for 100000 service rendered and service tax @ 12% which is 12000, for a total of 112000.

Now, should i pay the service tax on the transaction with A immediately, without waiting for A to pay me the amount?

In respect of B, i would be paying the amount of 12000 service tax, only after B pays me the amount of 112000.

Because of the budget changes, am i liable for service tax as soon as i treat A as my Debtor (being a related party)?

Can someone please clarify? That would greatly help.

Thanks in advance.

Best Regards / VIjay

sir,
we r apvt.ltd.co, working as a builder, we gave the works cotract ( excluding cement & steel),
my querry is that when works contractor raised the running bill, then at what amount he will charge service tax,
bcoz in notification no. 29/2007, mention the value of work contract service determined shall be equivelent to the gross amount charged for the works contract LESS the value of TRANSFER OF PROPERTY IN GOODS INVOLVED IN EXECUTION OF WORKS CONTRACT, and LESS VAT TAX,

then in the case of works contract we will deduct all material used in execution of work contract is it right ?