Service tax

Save Share

This query is : Resolved

Gaurav Rawat (Querist)

06 January 2016 A Co. X which provides advertising services to its customer and charges lets say 100 and for providing that services it also takes services from publish co Y for which they charge as follow
Purchase 100
discount 15
Net amt paid 85
to Y
Now what Co X is doing that it is charging service tax on 15 i.e rate calculation that we are doing is 14.5-85%=2.175% and making entry in tally as follows:
Z(customer) 100
To Sales 97.825
To Service tax@2.175% 2.175
My Query is that whether we are doing correct or not and how to show the same in Service tax return ?

CA. Divyansh Agarwal

CA. Divyansh Agarwal (Expert)

06 January 2016 No it is totally wrong after the amendment in finance act 2015 all reimbursement expenses are taxable it will be better to receive bill from co y on customer name thereby charging amount from customer as pure agent so the bill will be raised for two amount one as pure agent and second one for amount xo x charged extra

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now