Aggregator service or pure agent or works contract?????

Queries 330 views 2 replies

suresh kumar

CHARTERED ACCOUNTANT

29 Points Posted on 22 April 2016

Dear experts please clarify my confusion here

scenario:-

1) the company X offering a Four wheeler services through its web based app

2) once the potential customer book an appointment for service the X company will send executives to pick the car and taken it into its registered guarages (all local guarages since they are cheap and best at cost wise)

3) once the service over the X company will pay to guarage say Rs.2500/- and take the car back and return to customer at his place

4) now the X company will charge customer Rs.3000 (Rs.500 as its commission and balance towards guarages bill )

NOW ON WHICH AMOUNT SERVICE TAX NEEDS TO BE PAID ? UNDER WHICH SERVICE CATEGORY?

Replies (2)

MEGHA CHAUHAN

CHARTERED ACCOUNTANT

61 Points Posted on 22 April 2016

Provision of Pure Agent - The value of such service procured on behalf of client is excludable from taxable value for payment of service tax, if and only if (i) that service provider charges the client directly, (ii) pure agent does not holds right of such services (iii) pure agent receives the actual amount of such service from the client.

As in your case X Company receives 500 over and above as its commission so X Company is not acting as a pure agent , hence service tax s to be paid on Rs. 3000.

suresh kumar

CHARTERED ACCOUNTANT

29 Points Posted on 22 April 2016

hi megha but here the guarage fellow use material also while providing the service so rs.2500 include for material and labour in that case how service tax will applicable ?? or do v need to pay under works contract.