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Service tax payment

vishak (accounts) (488 Points)

02 November 2015

one of my Clint. his last year turnover was above 10 lakhs. now he pay service tax. but was not geting servicetax from one party. can he need to pay that amount him self ?

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3 Replies

CA. Kapil Goel, DISA(ICAI) (cakapilgoel.wordpress.com) (2191 Points)
Replied 02 November 2015

No, If none of his client pays service tax to him. Then as per law it is assumed that gross receipts from cleint includes service tax part also. So, the entire amount will be divided by 14% and the resulting figure will be assued asa taxable amount. and service tax will be charged on that amount.

For example :-

if he receives amount of Rs. 100.00 from a customer. then taxable amount on which service tax is to be charged will be Rs. 87.72 (100 / 1.14) and service tax payable will be Rs. 12.28.

Niraj Kumar Sinha (Sr. Officer, SPSIL) (648 Points)
Replied 02 November 2015

Your party make payment to you or not, but if once you have charged service tax on your bill, you have to pay this amount to the GOI ( in case of direcet charge). If provided service comes under Reverse charge, you need not to be worry about service tax payment.