Service Tax - Billing and Rounding Off

I wanted to understand the rounding off for Service Tax computation. As I understand service tax, when we say 10.3% - it actually has 3 components - 10% Service Tax, 2% Education Cess on the service tax amount and 1% Higher Education Cess on the service tax amount.

 

Now when we generat an invoice to a customer, say of Rs. 12345/- as base charge and then if add there components - viz Service tax @ 10% =1234.50, 2% Ed. Cess = 24.69 and 1% Higher Ed. Cess = 12.34. In the Invoice are we put these fractions for all these and then do a round off in the final total or do we round off each individual tax entities to closest Rupee?

Thanks,

Umesh

Replies (2)

You can round off each individual tax entities to nearest rupee.

 Service tax ( including interest, penalty, refund) is to be rounded off to the nearest rupee. 50 paise or more should be rounded off to the next rupee and less than 50 paise should be ignored.

( Refer Board’s Circular No.53/1/2003 dated 11.03.2003)

 

the former is the correct, put these fractions and then round off the total amount............

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