03 June 2014
I am a grocery shop owner people come at my shop and ask to swap credit card and give them cash. And I charge them say 6% for doing this. Foe example one swap credit card for rs.5000 i pay him rs.4700 and i get 300 rs as my income.
My queries are: 1) Is this is legal?? 2) What tax I need to pay? Need to pay on swapped amount(5000) or the amount which I earn(300)?
Please let me know ASAP. Thanks in advance for your valuable suggestions.
03 June 2014
you are getting commision for the same and u must register for service tax in case when ur gross reciepts in total exceeds rs 10,00,000 but get reg when it exceeds rs 9 lakhs.
1. with regards to legality, its a bit dicey thing. you are converting white into black though on a very micro scale.
2. with regards to taxation (income), it depends on whether you have the trail for the cash paid to these people. If there is no trail as an evidence, your tax shall be on the whole of the swiped amount.
03 June 2014
Thanks Tushar n Nikhil. Nikhil 1) did u mean if I have say transaction of 10,000,000 in a year then is it illegal? 2. How can I register for service tax. As said by Nikhil the tax will be paid on the whole. Nikhil what type of evidence will work. Can you please elaborate little bit on this by example?
Please help me how should I go so that I have to just pay service tax n it should be totally legal.
CAclubindia
