Payment of Service Tax

This query is : Resolved

Srinivas Sharma KN (Querist)
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04 January 2011 Father and son are having business of providing crane services. Son gives his vehicle to father on rental basis to his father. In turn, father uses vehicle & collects hire charges and service tax thereon. Father pays hire charges to his son as per mutual terms. Son, accounts the amount so received and does not collect service tax. Now,

1. Does son also required to collect service tax on the amount received from his father?

2. If yes, will this not amounts to double taxation for the same service?

3. If no, please refer any circular or judicial decision in this regard.

CA Gunjan H Shah

CA Gunjan H Shah (Expert)
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07 January 2011 son gives vehicle for say X Rs per year

father leases out for say X + Y Rs

Son requires to collect if it is falling under Supply of Tangible Goods Service. Assuming in your case u r exceeding limit of `10 lakhs

Double taxation would not be there, as father would be able to take credit of Service Tax paid to son while making payment to the Government

Son will charge X + Service Tax
Father will charge X+ y+ Service Tax

Son will pay to govt service Tax on X
Father will pay after deducting what son has paid.

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