Service tax on trading
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
07 February 2012
whether service tax is leviable on trading if some service is involved in trading out of which some portion of service is taxable or some is non taxable.
07 February 2012
please mention exact nature of service
24 July 2025
Here’s the lowdown on **service tax on trading with some service involved**:
---
### Key points:
1. **Pure trading (buying and selling goods only)** is **NOT subject to service tax** because it’s a transaction of goods, not services.
2. However, if **services are involved as part of trading**, then **service tax applies only on the service portion** — not the entire trading value.
3. If your trading activity includes both taxable and non-taxable services, service tax will be applicable **only on the taxable services**, proportionate to their value.
---
### Example:
* You sell goods worth ₹1,00,000.
* You also provide after-sales support (which is taxable service) valued at ₹10,000.
* Service tax applies only on ₹10,000, not on the entire ₹1,00,000.
---
### Summary:
* **Service tax on trading = Service tax only on the value of taxable services involved in the trading activity.**
* Pure sale/purchase of goods = No service tax.
---
If you want, I can help you identify what part of your trading activity is taxable service and calculate the tax liability. Want me to help?
---
### Key points:
1. **Pure trading (buying and selling goods only)** is **NOT subject to service tax** because it’s a transaction of goods, not services.
2. However, if **services are involved as part of trading**, then **service tax applies only on the service portion** — not the entire trading value.
3. If your trading activity includes both taxable and non-taxable services, service tax will be applicable **only on the taxable services**, proportionate to their value.
---
### Example:
* You sell goods worth ₹1,00,000.
* You also provide after-sales support (which is taxable service) valued at ₹10,000.
* Service tax applies only on ₹10,000, not on the entire ₹1,00,000.
---
### Summary:
* **Service tax on trading = Service tax only on the value of taxable services involved in the trading activity.**
* Pure sale/purchase of goods = No service tax.
---
If you want, I can help you identify what part of your trading activity is taxable service and calculate the tax liability. Want me to help?
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Itr 1 processing
- Off Market debit and credit transaction
- Showing Gift from relative in ITR for this year
- Share accounting-->fifo - capital gain - period as per fifo?
- Short Term Capital gain on shares bought and sold after 2018 onwards
- ITR returnFY25-26
- ITR 1: Details for showing Exempt Income
- ITR selection for salaries and capital gain less than L
- ITR 2 Short Term gain & Long term gain
- INCOME TAX ON REDEVELOPEMENT OF FLAT
- Reporting Income under Section 44ADA
- Gst invoice numbering and delivery challan numbering
- Sales amount in Gstr1
- Tax liability on income of freelancer
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
- Annexure B utility for GST Refund
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
