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Regarding liability of service tax

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(Querist)
03 February 2012 Firm A services (Partnership Firm) is a service provider of "TATA TELESERVICES LTD" engaged IN SALES OF 'TATA DOCOMO'recharge vouchers. 5% discount given to Firm A.In turn the A Services is permitted to resell these coupens to retailers at 3% to 3.5% discount.the results in earning by the A Services in the shape of retention of an amount equal to 1.5% to 2% of M.R.P of E-recharge Vouchers.can the firm A services get the exemption of small service provider because the commisiion received by the firm A services is below than 10 lakhs. pls reply me as soon as possible because it is the matter of service tax audit. pls convey me related notification and circulars.
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Arun Gulati

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Arun Gulati (Expert)
04 February 2012 In my view, you are not entitled for benefit Notification No. 6/2005 as you are providing services under a brand name or trade name. In my view, you are liable to pay service tax on 5%, not on your margin as tax is on gross value not on profit margin.. refer section 67 of the Finance Act, 1994.
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