Service tax credit

This query is : Resolved

RAKESH KUMAR (Querist)
Follow

10 August 2013 I have a query for you to solve regarding service tax.
service tax input on one service can be used to set off against service tax out put on other service (For Example service tax input on security services can be set off against service tax out put on professional fees) and pay the service tax.
Please solve this query to me.

@VaibhavJ

@VaibhavJ (Expert)
Follow

10 August 2013 Hi

Since Service tax is Indirect mode o taxing, where in services receiver is liable to pay service tax & service provider collects tax from service receiver and pays to government.

Knowingly unknowingly businessman enjoys many services, few of them are taxable & few are tax free and in the ends he pays service tax to government while utilizing any services.

So sum all service tax paid on services received by you is Input Service Tax and you can claim cenvat credit of service tax paid to meet/set-off your output tax liability.

An output tax liability arises when a businessman provides a taxable services. Here he has to pay service tax to government by collecting from receiver of services. So when you are providing any form of services, you are service provider.

Hence in given question by you: You are utilising input services of Security Agency & paying service tax e.g. Say 10K in a month. You are professional & providing professional services on which you are charging service tax e.g. say 30K.

So while making payment of 30K service tax to gvt. you can set off 10K and pay net 20k only to govt. since you have already paid 10k to government indirectly.

Hope i was able to clarify your doubts.

Cheers//VaibhavJ

Message likes : 2 times

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

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Pratap Kumar De

BIBIN KUMAR

CA Lalit Kumar Agrawal

CA Ravindra Jain

Yash

Subscribe Now

Service tax credit

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA