Kindly Answer at the Earliest

I will go with Option-2.................... Which is right way !!!!!!!!!!!

But in the both option Service tax libility will remain same

Hi! I will go with option B as technically abatement is provided in respect of VALUE OF TAXABLE SERCICES and not for TAX RATE. Tax rate is uniform for all taxable services.

abatement @ 50% is calculated on gross service value i.e. rs.1000 . ST @ 10.3% is applied on net taxable service i.e on rs 500.

1st take abatement on amount then only calculate the tax liability. 

not able to under 

Since Service tax is applicable only on Taxable service, that is only after abatement, so Option "B" will be more appropriate

As per the essense of the text of law ..abatement has been introdued on the value...no where in the law it is written that tax rate can be abated. so tax rate being fixed and value has to be abated.

Option 2 is Best.

option 2 is the better way... 

Option 2 is the correct way

Originally posted by : Kunal Agrawal
	Hi! I will go with option B as technically abatement is provided in respect of VALUE OF TAXABLE SERCICES and not for TAX RATE. Tax rate is uniform for all taxable services.

agreed with kunal

Option No. 2 is Correct.

As per Service Tax Rules, Abatement is on the VALUE of TAXABLE SERVICE.

It is NOT on the RATE of Tax.
 

2nd is currect.