Service tax liaibility
Querist : Anonymous
Suppose a company by mistake pays an service tax on bill of contractor who is actually exempted from service tax as his limit of turnover doesnot crosses Rs.10.00 lakhs,in such a case if that contractor utilises the money for him self but does not deposits into govt.treasury what will be the consequences on contractors and company.
Regards.
Rajesh K
The exemption from Service tax upto Rs. 10 Lakh is not automatic. It is optional. As the contractor has charged service tax, he has not opted for the exemption. It is incorrect to say that the service tax is exempted on this ground.
It is the liability of the contractor. If not paid, penal consequences like interest and penalty shall follow.
Even assuming that the tax was collected wrongly, the same shall be remitted into Govt's tresury u/s 73A.
Querist : Anonymous
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