related party transaction

This query is : Resolved

karan (Querist)
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18 June 2009 in case I recieve a service from a related party amounting to Rs 100 and ST is Rs 10.
he bills me an amt of Rs 110, in a related party trans disclosure should i have to disclose Rs 100 or 110.
More over related to income i provide a service of Rs 100 and a related party deducted TDS of Rs 10, again what is the amount of disclosure.
Does me taking or not taking input credit to the above services alter the disclosure amount?
Please clarify

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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18 June 2009 Rather than a hypothetical case if you can let us know what exactly is the transaction and what is the doubt we can examine.

karan

karan (Querist)
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19 June 2009 the transaction is the same as said,
a transaction has been made where service tax input credit has been taken, should the amt of disclosure in related parties should be gross or net of service tax?

karan

karan (Querist)
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Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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21 July 2025 For Related Party Transaction (RPT) disclosures, the key principle is to disclose the gross value of the transaction, excluding taxes like service tax.

In your scenario:
You receive a service from a related party:
Service value = Rs. 100
Service tax (ST) = Rs. 10
Total billed amount = Rs. 110
Disclosure Amount:
You should disclose Rs. 100 (the value of the service excluding service tax) under related party transactions. Taxes like service tax are not part of the transaction value for RPT disclosures.

You provide a service of Rs. 100 and related party deducts TDS Rs. 10.
Disclosure Amount:
You disclose Rs. 100 (the gross value of the service rendered) as the transaction value. TDS deducted is not reduced from the transaction amount disclosed.

Regarding input credit:
Whether or not you take input credit on service tax does not alter the amount you disclose.
Disclosure is about the transaction value, not about tax credits or deductions.

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