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URGENT - Mandatory service tax payment

manoj kumar (cs) (130 Points)

16 January 2011

Dear Friends,

One of our newly incorporated client company is a service provider and also have a service tax regn. no. wants to know that they have billed to their client without asking the service tax, do they still need to pay the service tax. As per my understanding, all service provider, have to pay the service tax irrespective that that whether they have charged the service tax separately or not from their client.

is there any limit from which the service tax need to take compulsory?

regards

manoj kumar

company secretary

88009 11319

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10 Replies

Devendra (Chartered Accountant) (4775 Points)
Replied 16 January 2011

1) As per the Service Tax Rules, if the service provider has not charged Service Tax to the Service Recipient then while receiving the amount from the Service Recipient the amount received will be deemed to be including service tax. And the service provider will have to pay the service tax, even if he has not collected service tax from the client.

2) Your client will have to charge Service Tax in his bill when his turnover goes above Rs. 10 Lacs.

Regards,

Devendra Kulkarni

manoj kumar (cs) (130 Points)
Replied 16 January 2011

thank you Mr. Kulkarni,

if you pls let me know that if the billing amount does not exceed 10 lacs in aggregate, then do we will not liable to pay ST even if we r regd.

with service tax.

Pls provide the relevant section/notification etc. for the same.

manoj

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 17 January 2011

Notification New Delhi, the 1st March, 2008 No. 8/2008-Service Tax 11 Phalguna, 1929 (Saka)

G.S.R. (E).–In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 6/2005-Service Tax, dated the 1st March, 2005 which was published in the Gazette of India,

Extraordinary, vide number G.S.R. 140(E) of the same date, namely:-

In the said notification, for the words “eight lakh rupees”, wherever they occur, the words “ten lakh rupees” shall be substituted.

2. This notification shall come into force on the 1st day of April, 2008.

(Unmesh Wagh)

Under Secretary to the Government of India

[F. No. 334/1/2008-TRU]

Note:– The principal notification No. 6/2005-Service Tax, dated the 1st March, 2005 was published in the Gazette of India, Extraordinary, vide number G.S.R. 140(E), dated the 1st March, 2005 and was last amended vide notification No. 4/2007-Service Tax, dated the 1st March, 2007 vide number G.S.R. 158(E), dated the 1st March, 2007.

RAMESH KUMAR VERMA ( CS PURSUING ) (43848 Points)
Replied 17 January 2011

THX SHARMA G FOR ENLIGHTEN ON THE MATTER THROUGH NOTIFIACATION NO.08/2008 ST.

THX

manoj kumar (cs) (130 Points)
Replied 17 January 2011

thank you so much mr. sharma,

dear all

pls also give your confirmation for the following: (in layman's language)

1) if the value of taxable services does not exceed Rs. 10 Lacs in a FY the company need not to take the service tax from their client even though they are regd. with service tax.

2) further if the have collected the same from their client then only they need to submit to the concerned authority.

manoj

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 17 January 2011

Originally posted by : manoj kumar
	thank you so much mr. sharma, dear all pls also give your confirmation for the following: (in layman's language) 1) if the value of taxable services does not exceed Rs. 10 Lacs in a FY the company need not to take the service tax from their client even though they are regd. with service tax. 2) further if the have collected the same from their client then only they need to submit to the concerned authority. manoj

1) upto 10 lacs notification is valid and the service provider will not charge service tax to clients provided he does not takes cenvat credit on services received.

2) once registered the service provider must submit returns ( even nil return) half yearly basis by 25th oct and 25th april every year.

3) if the assesee collects any service tax before reaching 10 lacs that means that assesee is not interested to avail the benefits of notification 8/2008 and hence will required to pay service tax from Rs 1/- in that year.

manoj kumar (cs) (130 Points)
Replied 17 January 2011

thank you so much sir,

Pls clear my one more little confusion.

"if one has charge service tax from one client and not from another in the next invoice"

what may be the consequences?

manoj

manoj kumar (cs) (130 Points)
Replied 17 January 2011

one more thing i would like to say

this is the only protal where i got answeres of my almost all querries.

a very BIG thanks to all members of caclubindia.

manoj

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 17 January 2011

Originally posted by : manoj kumar
	thank you so much sir, Pls clear my one more little confusion. "if one has charge service tax from one client and not from another in the next invoice" what may be the consequences? manoj

charging service tax from any client means that assessee did not opted for exemption of 10 L, hence all the services tendered / billed during the year will be service tax paid, if assessee fails to pay, then department will make assessment and issue demand with interest and penalty.

1 Like

Nidhi Aggarwal (Partner) (21 Points)
Replied 12 October 2012

Dear Mr. Sharma,

Assessee can claim the benefit under Notification No. 8/2008-Service Tax, but how it is to be communicated to the department and what is the time limit of the same.

Please Clarify.

With Regards

Nidhi Aggarwal