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Service tax

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(Querist)
26 August 2014 there is a GTA who raises bil of Rs.100000(Freight) and not charged service tax in his bill because in this case reverse charge mechanism apply. A is the party who pay freight so he will calculate service tax and pay My question how to calculate service tax by Party A
OPTION 1
100000*25/100=25000
25000*12.36/100=3090

OPTION 2
100000*25/100=25000
25000*12.36/112.36=2750

if it is mentioned in contract that rate is inclusive of all taxes then which option is correct?
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Rupesh Jain

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Rupesh Jain (Expert)
26 August 2014 option I is right

you can calculate 3.09% of the freight bill

25% X 12.36= 3.09%
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CS,CA F,Numrologi TusharSampat

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CS,CA F,Numrologi TusharSampat (Expert)
26 August 2014 the ans is 3090........................
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