Advise on Service Tax

We are paying commisson on export as per the agecy agreement . Quarterly basis we are making credit note as per commission mentioned in Shipping bills. As per the attached file commission credit balance lying as on 15.03.2011 311151.00 in agents a/c.

 

Kindly advice regarding service tax payment on 30.03.2011 on commission 311151.00 . 

Replies (4)

Commission comes under BAS. Recipient based category for import of service . Your are liable to tax under reverse taxing. Threshold exemption not available. But cenvat credit is admissible if used for providing taxable service or manufacture of excisable goods.

any service received or provided after the sales from factory gate is not eligible for input credit, as it does not quality for "input services required for taxable output services / sales"

 

FACTS

 

A  firm engaged in the business of Tour operator having a contract with a client  of Rs 1 crore in relation to package tour and the firm provides service to the client by  through awarding sub contract (part of packaged tour) to 3 subcontractor of Rs 20 lacs each separately

After that the firm i.e. service provider raises a bill to the customer and charges service tax @ 2.58% as applicable in relation to packaged tour

Now question arises .

1.Whether the subcontractors are liable to pay service tax. @ 2.58% on taxable value of Rs

    20 lacs each separately

2.If sub contractor is liable to pay tax on total amount of Rs 60 lacs (considering  the

  value of taxable service provided by them and simultaneously the firm also paying

  service tax on Rs 1 crore  then in this case the contract value shall be of Rs 1.60 crore

  (1crore + 60 lacs) In this circumstances what are the service laws  as  applicable

 

3.If sub contractor is liable to pay tax on total amount of Rs 60 lacs and deposit the same

   the firm cannot take CENVAT credit due to availing of abatement scheme.

In that circumstances the principal main Contractor is liable to pay Service tax 1.00 cr. @ 2.58% and also contractors shall also to pay 20 Lacs each . Is it correct or not Please enlightened us on the above subject.

Originally posted by : Ajeet Kumar Sarraf

 

FACTS

 

A  firm engaged in the business of Tour operator having a contract with a client  of Rs 1 crore in relation to package tour and the firm provides service to the client by  through awarding sub contract (part of packaged tour) to 3 subcontractor of Rs 20 lacs each separately

After that the firm i.e. service provider raises a bill to the customer and charges service tax @ 2.58% as applicable in relation to packaged tour

Now question arises .

1.Whether the subcontractors are liable to pay service tax. @ 2.58% on taxable value of Rs

    20 lacs each separately

2.If sub contractor is liable to pay tax on total amount of Rs 60 lacs (considering  the

  value of taxable service provided by them and simultaneously the firm also paying

  service tax on Rs 1 crore  then in this case the contract value shall be of Rs 1.60 crore

  (1crore + 60 lacs) In this circumstances what are the service laws  as  applicable

 

3.If sub contractor is liable to pay tax on total amount of Rs 60 lacs and deposit the same

   the firm cannot take CENVAT credit due to availing of abatement scheme.

In that circumstances the principal main Contractor is liable to pay Service tax 1.00 cr. @ 2.58% and also contractors shall also to pay 20 Lacs each . Is it correct or not Please enlightened us on the above subject.

you have option to charge full rate of tax with input credit of tax paid by sub contractor or avail the abatement and forget the tax charged by sub contractors. 

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