Foreign commission

This query is : Resolved

CONFIDENT DENTAL EQUIPMENTS (Querist)
Follow

27 January 2016 Dear Sir,

We have a special case of service tax liability raised in audit of central excise during Dec 2015.

There was a Tender from Indian Army for Supply of Imported Dental Equipments to be supplied directly by foreign manufacturer

The Indian Agent Commission of 5% was allowed as per Tender Terms

Tender was awarded to M/s Planmeca Finland

Tendered items were supplied directly during 2012 when foreign commission was not chargeable to tax

The foreign Party was insisting on adjustment against supplies to us and we refused to accept due to customs difficulties.

After prolonged arguments and discussions finally the actual receipt of commission was effected on 12.10.2014 by which time the service tax was chargeable even on foreign commission

Provision was not made in accounts during 2012-13 due to ambiguity for how to receive the commission

The Value of Commission is nearly 92000/- Euro (Value on the Date of Receipt was nearly 67.5 Lakhs)

Now excise auditors are asking to pay service tax on receipt basis @14% along with interest and penalty.

We need your opinion in applicable ST for the examination of all issues and legal opinion.

Please provide the same.

With Regards,

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
Follow

27 January 2016 As per point of taxation Rules under reverse charge mechanisam, the point of taxation is the date of completion of service if invoice is not issued within 30 days from the date of completion of service.
At the time of completion of service service tax not applicable, hence demanding service tax on receipt basis is not justified.

Message likes : 1 times

CONFIDENT DENTAL EQUIPMENTS

CONFIDENT DENTAL EQUIPMENTS (Querist)
Follow

27 January 2016 central excise auditor have made a point since the same is shown in balance sheet you have to pay service tax with interest and penalty , is that correct.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
Follow

27 January 2016 We have to see only service tax Rules not the balance sheet. Ask him to quote the Rules.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Akshay Jain

chandradhass sathish

Gurunathan kannan

Rakesh Bansal

yadagiri

Subscribe Now

Foreign commission

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

GST CONSULTANCY

Article Assistant

Manager- Finance and Compliance

Accountant

GST CONSULTANT

CA Final