Discount on Bill

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 April 2010 If a service provider have provided discount on the bill, then whether service tax should be calculated on the Amount after discount or the service tax should be charged on the actual amount of service provided ? For example Input amount is 100 and service tax is 10.3 gross amount is 110.3 but the service provider has given discount of Rs.20 then whether the service tax amount should be reduced propationately or it should be 10.3.

CA. Ashish Bihani

CA. Ashish Bihani (Expert)
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16 April 2010 It depends upon the accounting policies of service provider to discount and charge service tax.

But the same can be done in following way -

Service Charge Amount
(-) Discount
(=) Net Service Charge Amount
(+) Service Tax on Net Service Charge Amount
(=) Total Bill Amount incl. Service Tax