18 October 2011
lets consider an example A is client and total work is of Rs.100/- hence service tax on this will be Rs.10/- ( not considering the Cess) hence total payment to be made by A to B is Rs.110/- and total service tax to be paid/deposited by B to Govt. for providing his services to A is Rs.10/- Now lets go further Now amongst the above work B is taking services from C for providing his service to A of lets say Rs.60/- hence total payment to be made by B to C will be Rs66/- (Rs.60+Rs6 for service tax) n C will deposit Rs 6 to Govt. but as service provided by C to B is input servce to B, B can take credit of Rs.6/- while paying his duty liability of Rs.10/- hence B will have to pay Rs.4/- only. There is not at all double taxation for same service provided and payment made.
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