Aditya (CHARTERED ACCOUNTANT) (179 Points)
28 November 2012Small business house selling goods whose turnover above Rs. 10 lacs, but paying fees to advocates on account of Sales Tax, Income Tax , filling appeal etc , are required to obtain service tax no as service reciver and pay service tax
further they may not be required maintain books of accounts as per section 44AD of income tax act
CA Pintu Mishra
(Chartered Accountant- Industry)
(514 Points)
Replied 29 November 2012
|
Legal Services provided by advocate (whether individual or firm) to any business entity |
Rendered by-
individual or firm |
Service receiver-
Business entity with a turnover more than rupees ten lakh in the preceding financial year; |
Dipjyoti Majumdar
(CA in service & CS. dipmaj@ rediffmail.com )
(3459 Points)
Replied 29 November 2012
I would like to ask if I would be violating service tax law if I classify / treat such services as Consulatncy service from Chartered Accounants.
In that case if the individual CA service provider has his turnover , 10 L , the service receiver's cost is reduced as there would be no tax liability.
But again, will it be tax evasion or tax avoidance.
Regards,
CA Pintu Mishra
(Chartered Accountant- Industry)
(514 Points)
Replied 29 November 2012
In this case if you are paying service tax under reverse charge mechanism, you are also getting refund for the same.
As you said to get a similar service from a CA who is not touched 10lac mark and not charging ST would not amount to evasion if actually service is rendered by CA. There are many companies who were paying fees to the directors have now started to pay as salary to avoid the burden of service tax. It is not called tax evasion but tax planning.
CA Pintu Mishra
(Chartered Accountant- Industry)
(514 Points)
Replied 29 November 2012
*not refund but cenvat credit
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