Chargability of Service Tax

This query is : Resolved

CA Paresh Bhagwat (Querist)
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14 November 2008 Whether company can charge service tax on the amount of stamp duty included in invoice?
e.g.
Basic Freight Rs. 10,000
Insurance Rs. 2,000
Stamp Duty paid to Govt (Based on Basic Freight) Rs. 1,000
Sub Total Rs. 13,000
Add : Service Tax Rs. 1,607
Total Rs. 14,607

Whether it amounts to charging tax on tax?

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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14 November 2008 What is that stamp duty for?

Ravikumar.G

Ravikumar.G (Expert)
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17 November 2008 Stamp duty is a form of tax that is levied on documents. Historically, a physical stamp (a tax stamp) had to be attached to or impressed upon the document to denote that stamp duty had been paid before the document became legally effective. More modern versions of the tax no longer require a physical stamp.

Ravikumar.G

Ravikumar.G (Expert)
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17 November 2008 Rule 5(2) provides that the expenditure or cost incurred by the service provider as a pure agent of the recipient of service will be excluded from the value of taxable service.

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