Tax on service charges

This query is : Resolved

rajni (Querist)
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02 July 2013 sir, please tell me its urgent,our client received carriage & forwarding charges i.e. Rs.100 per unit, these carriage & forwarding charges consists of labour loading, unloading,freight paid for local carrying truck/trolly,rent paid for storage plus extra genuine charges per unit. our client pays service tax on net service charges of Rs.10 after deducting above expenditure.
Now service tax deptt. says that assesee is liable to pay tax on whole amount of bill i.e. Rs.100 without deducting expenditure.
Please tell what is the correct provision of service tax.

Ganeshbabu K

Ganeshbabu K (Expert)
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02 July 2013 ,Yes.. even in my opinion service tax has to be paid on total Rs.100/-

because service tax is to be payable on gross amount charged to client

if re-imbursement expences are claiming in seperate invoices and bills for expences paid by him were provided to client service tax not applicable on re-imbursement expences..

so in your case it seems service tax applicable on 100/-

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