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?
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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