05 June 2014
Our company is making payment to hotel for giving accommodation to its non executive director.Is company liable to pay service tax as per reverse charging mechanism following ts notfn.45/2012. Service tax audit by department demands payment of the same. But if we pay service tax on hotel room tariff it will lead to double taxation as hotel charges its service tax on its room tariff. Please advice whether ST has to be remitted by following notfn mentioned above in this case . very urgent
05 June 2014
No. Service tax is to be paid, if the amount is going to be paid to directors directly. In case the company is paying for the hotel accommodation of the directors for business purpose, and also paying service tax on tariff to the hotel, there is no need to pay service tax again on reverse charge mechanism.
05 June 2014
Thank You Amol. Is there any circular / clarification issued by CBEC in this regard ? .... because it is this department audit wing itself demands ST in this case Th argument is that value of service provided included hotel tariff also !!!
CAclubindia
