Applicability of Service Tax and TDS on display of movies

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CA Ravi Shankar K (Querist)
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14 April 2009 Pallavan Transport Consultancy Services ltd., (PTCS) the nodal agency, on behalf of the State Transport Undertakings (STUs) fixed an operating agency for display of movies in buses through Build, Own, Operate and Maintain (BOOM) method through open tender. The rate for display of movies is fixed as Rs.262/- per bus per day. This is inclusive of all taxes and levies. An agreement with the operating agency is signed by the individual STU.

PTCS is deducting 5% service charges and the service tax on the service charges from the amount payable to the STUs.

Under the above circumstances the following queries may be answered?

1. Who is the service provider and the service receiver?
2. Who is liable for the recovery and remittance of service tax?
3. Whether service tax is to be recovered from the total amount payable by the operating agency?
4. Whether recovery of service tax by PTCS on the service charges @5% deducted from the amount payable by the operating agency is correct?
5. Whether TDS has to be recovered on the amount payable by the operating agency?
6. Whether TDS has to be recovered on the amount of service charges payable to PTCS?

SIVA NAGESWARA RAO

SIVA NAGESWARA RAO (Querist)
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14 April 2009 Dear Friends,
can you please tell me the new professional tax slabs for karnataka with effect from 1st april 2009.

Dayal

Dayal (Expert)
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18 April 2009 following queries answered

1. PTCS is the commission agent and operating agency is service provider and STU is the service receiver as agreement is between Operating Agency and STU
2. The operating agency in this case is liable for the recovery and remittance of service tax to the government for services rendered to STU.
3. Service tax is to be recovered only on the service charges as PTCS is commission agent for other case Rs. 262/- is inclusive which probably includes both vat and service tax
4. Yes since they are the mediators and 5% is the commission drawn which is subject to service tax and covered under BAS
5. Yes TDS needs to be recovered on the amount payable by the operating agency
6. Yes TDS has to be recovered on the amount of service charges payable to PTCS

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