Gross Amt. of services

This query is : Resolved

Shikha Bajaj (Querist)
Follow

22 February 2010 if a coaching institute's tution fee is rs.1lac and service tax is charged 10,300rs. accordingly....

if at the time of joining the institute, a student gets 50% scholarship, then what will be amount of service tax in following cases?

CASE1-IF HE HAS NOT YET PAID THE FEES

CASE2-IF HE HAS GIVEN AN ADVANCE OF 30,000 rs. AND SUBSEQUENTLY BEEN GRANTED SCHOLARSHIP

CASE3- IF HE HAS PAID THE ENTIRE FEE OF rs.1,00,000

Shikha Bajaj

Shikha Bajaj (Querist)
Follow

23 February 2010 Experts, Pls reply.

Thnx

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
Follow

26 July 2024 Here's how to handle the service tax in each case, given a coaching institute scenario where a student gets a 50% scholarship and the service tax is 10,300 Rs on a tuition fee of 1L Rs:

### **Understanding the Scenario:**

- **Total Tuition Fee (before scholarship)**: ₹1L
- **Service Tax Rate**: Assuming the service tax rate is 10.3% (as of the period you mentioned).
- **Service Tax Amount**: ₹10,300

**50% Scholarship**: Reduces the fee to ₹50K

### **Service Tax Calculation**

The service tax should be charged on the amount actually paid by the student, which is the amount after the scholarship is applied. Here’s how it applies in each case:

### **Case 1: If the Student Has Not Yet Paid the Fees**

Since the student has not paid the fees yet and has been granted a 50% scholarship:

1. **Original Fee**: ₹1L
2. **Fee after 50% Scholarship**: ₹50K

The service tax should be calculated on the ₹50K (i.e., the amount the student is actually required to pay):

- **Service Tax Amount** = 10.3% of ₹50K
- **Service Tax Amount** = ₹5,150

**In this case, the service tax payable would be ₹5,150.**

### **Case 2: If the Student Has Given an Advance of ₹30K and Subsequently Been Granted Scholarship**

1. **Original Fee**: ₹1L
2. **Fee after 50% Scholarship**: ₹50K
3. **Advance Paid**: ₹30K

The total amount due after scholarship is ₹50K. Since the advance is less than the total fee, the student will need to pay the remaining ₹20,000.

**For Service Tax Calculation:**

- **Service Tax** = 10.3% of ₹50K
- **Service Tax Amount** = ₹5,150

The service tax is calculated based on the final amount payable, which is ₹50K

**In this case, the service tax payable would be ₹5,150, regardless of the advance payment.**

### **Case 3: If the Student Has Paid the Entire Fee of ₹1L

If the student pays the full fee of ₹1L before the scholarship is applied:

1. **Fee after 50% Scholarship**: ₹50K
2. **Amount Paid**: ₹1L

Since the fee after applying the scholarship is ₹50K, the service tax should be recalculated on this amount:

- **Service Tax** = 10.3% of ₹50K
- **Service Tax Amount** = ₹5,150

**The student should be refunded the difference between the service tax originally paid (₹10,300) and the revised service tax (₹5,150):**

- **Refundable Service Tax** = ₹10,300 - ₹5,150
- **Refundable Service Tax** = ₹5,150

**In this case, the student should receive a refund of ₹5,150. The correct service tax is ₹5,150.**

### **Summary**

1. **Case 1**: Service tax payable = ₹5,150.
2. **Case 2**: Service tax payable = ₹5,150.
3. **Case 3**: Refund of ₹5,150 is due if the full fee was paid before the scholarship was granted.

These calculations are based on the assumption that the service tax rate is 10.3%. Adjustments should be made if the service tax rate has changed. Additionally, make sure to follow any specific guidelines or rules issued by the relevant tax authorities regarding the application of service tax on fees and scholarships.

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

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

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

Sanoj T

madhu Reddy

Vasudevan Santhanam

velichety.l.narasimharao

shanmukha sai

Subscribe Now

Gross Amt. of services

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA