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?
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?
Nikhil Kaushik
(Expert)
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?
Nikhil Kaushik
(Expert)
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.
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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.
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16 December 2013
you are welcome Jay.
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