Taxability of j&k

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Abhishek Gaur (Querist)
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30 April 2014 whether service provided by HEAD office situated in j&k to its BRANCH office in haryana taxable??? IF yes then who is liable to pay service tax ??? pls reply soon as possible...

CA Sachin D Jain

CA Sachin D Jain (Expert)
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01 May 2014 One cannot charge service tax to itself. There have to be two entities for the applicability of service tax. A company having HO in J&K and Branch in Haryana, can not charge service tax to itself.

CA Sachin D Jain

CA Sachin D Jain (Expert)
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01 May 2014 However, in your case, Service tax will be applicable as the entity in non-taxable territory (i.e. J&K) will be considered as a separate entity. The entity which is receiving the service i.e. branch in Haryana will have to pay Service tax on the amount of taxable services received from HO in J&K under reverse charge basis, after considering necessary abatements and reverse charge percentage.

But one should not charge for any amount of services from its branch as there will be loss of Service tax to the company.

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