Service tax payable on short payment?
This query is : Resolved
07 June 2016
A company is availing service of contractor for cotton loading & unloading at piece rate system. For example, A piece rate of ₹10 per cotton bale is decided. In a particular period, contractor made an invoice of ₹114500 (10000 cotton bale @₹10 each + S.tax @14.5%). Out of total bill amount, company deduct ₹10000 due to non completion of work within scheduled time & deducted ₹20000 of diesel cost, which is provided by company to contractor for running his tractor (which was otherwise purchased by contractor, if not provided by company). Now after deduction of ₹30000, company made payment of ₹84500. Now my question is whether company is liable to pay service tax on ₹100000 or ₹70000 (100000-30000). Please advise with reference of act.
Vivekanand Kushwaha
(Expert)
07 June 2016
As per provision of valuation under section 67 of Finance Act 1994:
1)Service tax is payable on gross amount charged by service provider for service provided or to be provided
2) Consideration includes reimbursement expenditure or cost incurred by service provider and charged(except where condition of pure agent are satisfied).
Therefore, Service tax will be applicable on Rs. 1,00,000.
1)Service tax is payable on gross amount charged by service provider for service provided or to be provided
2) Consideration includes reimbursement expenditure or cost incurred by service provider and charged(except where condition of pure agent are satisfied).
Therefore, Service tax will be applicable on Rs. 1,00,000.
Vivekanand Kushwaha
(Expert)
07 June 2016
As per provision of valuation under section 67 of Finance Act 1994:
1)Service tax is payable on gross amount charged by service provider for service provided or to be provided
2) Consideration includes reimbursement expenditure or cost incurred by service provider and charged(except where condition of pure agent are satisfied).
Therefore, Service tax will be applicable on Rs. 1,00,000.
1)Service tax is payable on gross amount charged by service provider for service provided or to be provided
2) Consideration includes reimbursement expenditure or cost incurred by service provider and charged(except where condition of pure agent are satisfied).
Therefore, Service tax will be applicable on Rs. 1,00,000.
Message likes :
1 times
Rupesh Jain
(Expert)
07 June 2016
on gross amount deduction will not reduce your service tax liability due to you take the service after that you deduct the amount.
Message likes :
1 times
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
- Depreciation Chart Companies Act
- GST Audit whether Govt Companies are exempt?
- EPF ECR NEW FILE SEP 17TH 2026
- PTRC Show Cause Notice on Email
- Capital Gail Exemption Certificate
- Utilisation Fy 25-26 TDS challans in Fy 26-27 TDS Return
- TAX AUDIT ON PROFESSIONAL INCOME
- Oct 2025 Invoices
- SECTION 393(3) TAX ON CASH WITHDRAWAL
- Capitalgain tax purposes for valuation report compulsory
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- EPF ECR NEW RULES Sep 17th 2026
- Taxation of crypto futures in India Fy 2026- 2027
- Transfer of Physical Stock Between Two Proprietorship Concerns
- Unable to File TDS Q2 Return – New TRACES Portal Error
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
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
