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Levy of service tax

Proud to be Indian (Articled) (65 Points)

10 February 2016

A partnership firm engaged in manufacturing steel Products pays service tax under service recipient category i.e. GTA , reversecharge. now same firm has provided labour to one of its client. in such case please tell me, can this firm collect service tax from its client ?? pls help...

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4 Replies

Mihir (Chartered Accountant) (42 Points)
Replied 10 February 2016

As the firm is already registered with the Service tax department it can collect the service tax on labour. The limit of 9 Lakhs is a option to choose. Even if the firm was not registered and wanted to collect service tax from the 1st rupee itself, it can do so

Proud to be Indian (Articled) (65 Points)
Replied 10 February 2016

Thanks for replying, but Mihir Sir, The firm has been registered under category of service recipient under taxable service of Transport of good by road ( Applicable for reverse charge mechanism).. in such case what will apply??

Govind Shah (CA Final) (75 Points)
Replied 11 February 2016

If you are goin to provide labour services in future, you will have to alter the registration (ST-2) and start collecting service tax.

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Mihir (Chartered Accountant) (42 Points)
Replied 11 February 2016

As per the rules if the amount of billing has not crossed 9 lakhs than you are not reauired to avail the service tax no. It will be better you dont take the no. and collect service tax from your client. Once you take the no you will come under supervision of one more dpartment.

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