Method of calculation of service tax
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
05 April 2015
there is a party providing legal service
party produce bill of Rs 600000
in bill not mention service tax component
now second party need to caculate service tax
which option should second party apply for calculating ST
Option 1
ST= 600000@12.36%
Option 2
ST = 600000@12.36/112.36
party produce bill of Rs 600000
in bill not mention service tax component
now second party need to caculate service tax
which option should second party apply for calculating ST
Option 1
ST= 600000@12.36%
Option 2
ST = 600000@12.36/112.36
05 April 2015
Service Tax applicable under Reverse Charge.
Service Tax @ 12.36% of Rs 600000/-
= Rs 74160.
Service Tax @ 12.36% of Rs 600000/-
= Rs 74160.
05 April 2015
In case where no service tax component is separately mentioned in the invoice, the amount of Rs.600000/- above is considered as inclusive of service tax.
Hence, Option 2,i.e.
ST=600000@12.36/112.36 applies in your case.
Also It would be wise for you to confirm with the legal firm regarding the amount of service tax and the professional fee payable by you and the method you wish to adopt.
Hence, Option 2,i.e.
ST=600000@12.36/112.36 applies in your case.
Also It would be wise for you to confirm with the legal firm regarding the amount of service tax and the professional fee payable by you and the method you wish to adopt.
06 April 2015
Incase you have to calculate service tax under RCM, you need to calculate the service tax on total value of Rs.6 Lakhs as advice Mr. Sanjay ji.
If it is regular service tax (other than RCM category) if party is not mentioned the service tax separately, you have to refer the agreement between you and the party,if the agreement says the price is inclusive of service tax then you can do the back calculation, if the agreement service tax applicable extra. then you can do the option 1.
If it is regular service tax (other than RCM category) if party is not mentioned the service tax separately, you have to refer the agreement between you and the party,if the agreement says the price is inclusive of service tax then you can do the back calculation, if the agreement service tax applicable extra. then you can do the option 1.
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