Dear All
We outsourced our Housekeeping Service & Driver Service to One of the Vendor, In the monthly invoice, He charges Service Tax on the Whole invoice Amount e.g Driver Salary Rs 5000+Service Charges 500. the Vendor Charges service Tax on Rs 5500/- in place of Service Charges of Rs 500/-, is this Correct ?
Yes it is correct, He can charge the service tax on draiver's salary. It has been alos proovde tin the case of – Shiva Travels v. CCE (2006) 7 STT 75 (CESTAT).
We can understand this matter with the help of following matter.
Suppose you appointed a securilty agency for providing security guards at your office premises. You wil pay salary to security guards against bill raised by secutiyt agency. Then you will pay service tax chaged by security agency.
Therefore you should pay service tax on whole amount
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