Service tax applicable on resale of services?

This query is : Resolved 

15 December 2013 Company A has resellers of it's services.

For e.g. Company X is one of it's reseller.

Company X sells a service for Rs. 100 and collects Rs. ~12 as service tax from customer.

Company X pay Rs. 90 to Company A for its services that were resold. Now, will company A collect service tax on Rs. 90 from company X?

15 December 2013 yes it is applicable.

16 December 2013 How can we avoid paying service tax multiple times on same service as in above case?

16 December 2013 Jai. you don't pay multiple times. You can take credit for the service tax paid on inputs. So effectively it works like VAT only.

16 December 2013 You only need to pay bal service tax payable if any after setting off the gross service payable and credit of any service tax already paid.

16 December 2013 Understood Thanks.

16 December 2013 you are welcome Jay.


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