Payment of service tax by other co.

There are two companies A & B.

Co. B has sold goods to co. A. Co. B is also providing taxable services to others.

Now, service tax liability of co. B is paid by co. A & co. A adjust this amount against amount payable to co. B for goods purchased.

Is this proper?

Is this allowed?

Replies (6)

yes it is ..service tax liability need not be paid by the liable person itslef. but do make sure that B co. is paying service tax amount by the name of A n co, and this happens with mutual understanding of oth the parties. as onus of proof lies on the assessee whether the tax dus were cleared or not.

But, here co. B is not paying any amount. It just adjust the amount paid by co.A on its behalf against outstanding dues.

If A Co. has filed the ST Challan by puting the Name and ST No.  of B Co. then no matter who pay the amount since it will accounted in the name of B Co. else, B co. has to discharge ST  liability separately.

 

absolutely yogesh...thats what i have tried to explain.
-cheers.

Kindly check the Payment Challan for Service Tax. If the registration no. and name of B Company is appearing in the challan, then the payment is duly accounted in there name irrespective of bank accout holder who can be A Co. or X, Y, Z who has issued the cheque or whose bank account is debited. Rest is the matter of accounting entries in the books.

Get GAR-7 Challan from Payee as a proof, Its Does not Matter Who Pays the Amount

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