one of my client carrying chit business collects service tax on 100% of chit commission and remitting service tax on 70% chit commission (after claiming abatement @ 30% of chit commission.)
collecting service tax on abatement portion value of taxable service is permissible?
This is not allowed.What ever service has been collected has to be deposited in the Govt. account even if collected where not due.
There is an express provision Sec.73 A wherein whatever has been collected as ST has tobe remitted to the GOvt. If you wish to avoid the same then the excess ST collected shshould be returned to the customer.
Interest is also applicable on the delayed payment.
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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