We provide services to customers and also takes services form our clients. Both services are same.
At the above case we are paying Tax to our clients and collecting form our customers,
Please clarify the below points 1.What is the Cenvat credit role in the above service tax issue 2.The service tax what we paying to the clients is more than the service tax we are collecting form our customers in every month
19 March 2012
The Service you are availing is Input Services and the services that you are providing is Output Services. For Eg : Say the amount of services you availed is Rs. 100 on which the ST is Rs. 10. And you have provided the service to your customer for Rs. 150 on which ST is 15. Now since you have paid ST Rs 10 on the input services availed, so you have to now pay the balance of Rs 5 into the a/c of Govt department (15-10)(Output ST - Input ST).
Now If your input ST is more than your output ST then you do not have to pay anything on the contrary you will be having excess ST credit to set off in the next period.