Service tax

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Shailesh Pongade

Accountat

32 Points Posted on 14 September 2016

Dear All

My queary is regarding service tax on reimbursement of tax payment

A = Cliant

B = Chartered Accountat

"A" dont have net banking, "B" paid Rs. 120000/- as TAX onbehalf of A through his net banking account, now my quary is wheter this Rs, 120000/- applicable for service tax.

"B" had service tax registration .

Please reply me in this reagards

Replies (3)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

121521 Points Posted on 14 September 2016

No. its not service.

AMBUJ SHARMA

CHARTERED ACCOUNTANT

157 Points Posted on 14 September 2016

it is not chargable in under service tax.

Thanks for the query Shailesh,
See as per Def. of service in Finance act,94 any activity which is a transaction in money is not a service, where transaction in money means and includes above situation,
thus it is not a service so no tax on it at all.
Point to note is, if CA charges any fees for this transaction as we actually do, say Rs.500/- that will make this whole transaction to be called a taxable service but tax will be chargable only on that part of fees, reason being that the value of service is 500/- is because 120000/- CA acts as a pure agent he does not hold any right over such amount even we are required to deposit such amounts in separate bank accounts and as per rule 5 of valuation rules for service tax such amounts are excluded from value of service.

Hope you have a detailed answer.
If in case of any issue please revert,
Thanks,
Abhimanyu