Help Urgent

This query is : Resolved

Amit Sharma (Querist)
Follow

08 January 2008 Dear Sir,

I have a doubt the following is the situation:-

The invoice amount is for 100 Rs, In our books we charge withholding tax @10% thatb means the invoice amount is now Rs110/-

Now Rs100/- is given to vendor & on that service tax is charged.

The excess Rs 10/- also do we have to charge Service Tax.

Sir and also please give me ref to which act or section you got the data from.

Thanks,

Amit

R.V.RAO

R.V.RAO (Expert)
Follow

08 January 2008 SECTION 67 OF FINANCE ACT 1994 WHICH DEALS WITH SERVICE TAX STATES THAT SERVICE TAX IS PAYABLE ON GROSS AMOUNT OF CHARGED BY THE SERVICE PROVIDER FOR TAXABLE SERVICES RENDERED OR TO BE RENDERED.
GROSS AMOUNT CHARGED WILL INCLUDE ANY AMOUNT RECEIVED TOWARDS TAXABLE SERVICE RENDERED TO BE RENDERED OR BEFORE,DURING OR AFTER PROVISION OF SERVICE .
SO YOUR LIABILITY TO CHARGE SERVICE TAX IS ON TAXABLE SERVICE RENDERED. ,WHICH IS RS. 100 BUT NOT ON RS. 10 WHICH IS A STATUTORY LIBILITY.
RS 10 DOES NOT CONSTITUTE TAXABLE SERVICE RENDERED BY YOU.
R.V.RAO

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