Service tax
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
22 July 2012
A Private Limited Company engaged in business of Publishing of books registered under Service –tax under Renting of Immovable Property .
Will you please clarify the position of service tax and cenvat :
1. It pays to Advocate Fee for his business and not for renting services.
2. It pays for freight for books sent to Mumbai through Transport. Amount involved Rs.750/-
3. It is publishing books with associates companies and share the expenses.
4. Are its Directors whom salary and traveling expenses (paid to traveling agent) Also be registered under service tax if the amount exceeds Rs.10 lac and if total amount does not exceed 10 lacs.
Will you please clarify the position of service tax and cenvat :
1. It pays to Advocate Fee for his business and not for renting services.
2. It pays for freight for books sent to Mumbai through Transport. Amount involved Rs.750/-
3. It is publishing books with associates companies and share the expenses.
4. Are its Directors whom salary and traveling expenses (paid to traveling agent) Also be registered under service tax if the amount exceeds Rs.10 lac and if total amount does not exceed 10 lacs.
22 July 2012
1. Advocate fee is payable under reverse charge and hence service tax is payable for his fee even if it is Rs.2000/- Cenvat can be claimed, if only the same is related to output tax.
2. Freight also is under reverse charge and as a service receiver you have to pay service tax 25% of the bill amount of above Rs.750/-
3. I do not think expense sharing with associate companies will come under service tax net.
4. The clarification says the following about payment to all kinds of directors.
a) fee - may be sitting fees
b) bonus/commission and not salary
c) company car/Trav. Expenses.
If your company engages a cab/car (not metered taxi) and avails the services it will come under reverse charge mechanism. See the notn for abatement and company share.
As you are already having a RC and you are private limited company, 10 lacs exemption cannot be availed for all reverse charge services mentioned above.
2. Freight also is under reverse charge and as a service receiver you have to pay service tax 25% of the bill amount of above Rs.750/-
3. I do not think expense sharing with associate companies will come under service tax net.
4. The clarification says the following about payment to all kinds of directors.
a) fee - may be sitting fees
b) bonus/commission and not salary
c) company car/Trav. Expenses.
If your company engages a cab/car (not metered taxi) and avails the services it will come under reverse charge mechanism. See the notn for abatement and company share.
As you are already having a RC and you are private limited company, 10 lacs exemption cannot be availed for all reverse charge services mentioned above.
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