My question is if a civil contractor only makes bill of service charges and also charges service tax on the bills raised by him.While calculating 8 % as income , wheather it would be on total receipt including service tax or excluding service tax?.Is there any circluar for this please clarify.
Mayur Shah
income @ 8% u/s 44AD will be calculated on gross receipts.
Receipts excluding Service tax
44AD - just because service tax is ultimately payable to government , it cannot be contended that it shall not be included in gross receipts , remember its presumptive tax. and it has to be included in gross receipts , therefore 8% is to be calculated on gross receipts plus service tax
Case law : ( given for section 44BB -presumptive taxation) DDIT (Int’l Taxation) v Technip Offshore Contracting BV Appeal No. ITA No. 4613/D/07 Dated: January 16, 2009
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