rate of service tax

This query is : Resolved

Surajit Das (Querist)
Follow

02 August 2010 we have already paid service tax @12.36% on Mob advance receipt basis. After reducing the service tax @10.3% we have charged service tax in bill @10.3% but clients have recoveed mob advance and also service tax amount @12.36%(which paid against mob. adv.) from our bill. we are financialy lost.
Pls. give us a opinion for Convince our client.

VINOD ARORA

VINOD ARORA (Expert)
Follow

02 August 2010 A harmonious reading of Section 65 and Section 68 would mean that taxable event is ‘providing of taxable service’. Section 68 clearly stipulates that service tax can be charged only when the service is provided. It is only the manner of payment, which is linked with receipt of payment. The time when the liability has to be discharged has only been linked with the receipt of payment. Therefore in the given circumstances, stand of the client seems to be correct. If the services have been rendered in 10.3% regime, then there is no point in even 12.36% on mob.adv. amount.

further, regarding your feelingg that you are loosing 2%, please understand that there is a remedy available to you in this regard, as under:

Third proviso to Rule 6, which deals with provisions governing adjustment of excess service tax paid, provides as under:

“Where an assessee has paid to the credit of Central Government service tax in respect of a taxable service, which is not so provided by him either wholly or partially for any reason, the assessee may adjust the excess service tax so paid by him (calculated on a pro rata basis) against his service tax liability for the subsequent period, if the assessee has refunded the value of taxable service and the service tax thereon to the person from whom it was received.”

A plain reading of the above provision indicates that in case services are not provided, service tax paid in excess may be adjusted. The taxable event is provision of services and hence the rate of service tax would be the rate in force on the date of rendition of taxable services.

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

tpksathyan narayanan

S D Kannan

ASIM ATREY AND ASSOCIATES

Tanishka Khandelwal

Vimlesh kumar

Subscribe Now

rate of service tax

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