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Service tax applicability

sandeep gupta (Advocate) (82 Points)

21 February 2015

Dear Professional,

Security service provider provide bill every month to our company in which he charge Salary of his Staff , ESI, PF, Service charges i.e commission for providing service and Charged Service Tax 3.09% [Under Reverse Charged Mechnisim].

Queery :-

1. How Much Total Receipt calculated for his income & Expenditure.

2. On Which Amount Service Tax Charged by him.

3. As per us Only Service charged by him i.e 6% on total before service tax is his income for income tax purpose .

Kindly clear above mention doubt

Regards

Sandeep Gupta

ca.sanjam @ gmail.com

9911232148

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2 Replies

Dharmesh (C.A.) (47 Points)
Replied 21 February 2015

Dear Mr.Sandeep Gupta

I understood that your client is security service provider and in the same context you have raised the question.

Q.1&3

Entire bill amount (exlcuding service tax) shall be his Income as your client is providing security service on principle to principle. He can claim expenses towards salary cost and other business expenditure.

Q. 2. On Which Amount Service Tax Charged by him.

Service tax shall be levied on entire bill amount. The rate of service tax depends, if he fullfiles the condition for partial reverse charge than 3.09% else 12.36%

I hope above will clear your doubt.

Regards

Dharmesh