treatment of service tax.

Save Share

This query is : Resolved

RAHUL LOHIYA (Querist)

08 March 2011 Hi friends, i want to share something which actually happens in our practical training...i am little confused about the Treatment of discount on service tax....plz help me out to resolved the following query.

As per recent addition in Services under the ambit of service tax .Services provided by the hospital in relation to treatment of patients on behalf of Companies to their employees & similarly payment made by life Insurance companies Under mediclaim & other services to their customers.
Our client (Hospital) generally charge the service Tax on the whole amount of Invoice, But as per the terms & agreement with the Insurance Companies considering the present competition 40-50% discount is allowed to them.....hence the payment received....in relation to the above services is half of the actual amount charged.....so what treatment should be Made for the balance payment......which is never receivable......at present whe are paying the tax on the actual amount received..........should we continue with the same.....??

Thanks in Advance.

sandesh mundra

sandesh mundra (Expert)

09 March 2011 You need to pay service tax proportionately.

For e.g. Bill raised is Rs.100 + Service Tax Rs. 10

And if amount received is Rs. 55, then only Rs. 5 service tax has to be paid.

S. Banerjee

S. Banerjee (Expert)

09 March 2011 Mr. Lohia,
"the terms & agreement with the Insurance Companies considering the present competition 40-50% discount is allowed to them" would you pl send me a copy of any agreement for my studies and understanding the matter at my mail id i.e banerjee.sambhu@rediffmail.com
Wating for your mail
thanking you,
S. Banerjee

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now