Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Charging service tax on new business unit

Queries 439 views 3 replies

Tushar

Service

159 Points Posted on 16 February 2016

We are into repairing and maintanance of electronic gadgets. We have entered into cotnract with a company for aspecific region for providing service of repairing and maintanance of electronic gadgets.

Since, we are newly established company and we have obtained the service tax number,

- Do we need to charge service tax in the invoice even if turnover has not reached limit of Rs. 10,00,000/-?

Seeking your valuable guidance for the query and its consequences if we collect the service tax on instruction of the contractee company.

Replies (3)

Kishore Reddy

89 Points Posted on 19 February 2016

There is no mandatory requirement for charging Service Tax in the invoice if the turnover is less than Rs.10L. If the Contractee company insists u for charging ST in invoice, Ok no problem u can collect ST from the company and remit the same to the governament after adjusting Input ST if any.

Sachin Gupta

7 Points Posted on 20 February 2016

There is an exemption in Service Tax till the value of Service provided doesnot reaches Rs. 10,00,000 but once it reaches Rs. 10 lacs then you must charge and pay the service tax but check whether in the last year or earlier years Value of Service provided does not exceed 10 lacs then only you can claim the exemption of same in this year.

And the contractee compayn can't force you to charge service tax but even if you have charged the service tax then pay it to the department.