CA AMIT KUMAR PANDEY (Job) (142 Points)
09 May 2015Dear Professional Experts
One of my client engaged in providing housekeeping services. His service value structure are as follows :
Salary of worker = 7500 (actually paid to the worker)
Agency Charges = 8% of Rs. 7500, i.e. Rs. 600
Total value of charged by our client to his customer = +7500+600 = 8100
Now my question is..... on which value my client charge service tax.
i.e. on Rs. 600/- or
on Rs. 8100/-
WAITING FOR YOUR PROFESSIONAL REPLY
THANK YOU.
CA AMIT KUMAR PANDEY
(Job)
(142 Points)
Replied 11 May 2015
WATING FOR YOUR REPLY EXPERTS.......
THANKS IN ADVANCE
Aditya RVS
(Practice)
(221 Points)
Replied 11 May 2015
Please refer to Sec. 67 of the Finance Act (extract enclosed below), where it is stated that value of taxable service shall be the gross amount charged for the service provided.
Hence, in the present case, your client is charging an amount of Rs. 8100 (7500 plus agency fees). Hence Service Tax needs to be charged on Rs. 8100 and not Rs. 600.
Valuation of taxable services for charging service tax.
67. (1) Subject to the provisions of this Chapter, where service tax is chargeable on any taxable service with reference to its value, then such value shall,—
(i) in a case where the provision of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by him;
(ii)in a case where the provision of service is for a consideration not wholly or partly consisting of money, be such amount in money as, with the addition of service tax charged, is equivalent to the consideration;
(iii)in a case where the provision of service is for a consideration which is not ascertainable, be the amount as may be determined in the prescribed manner.
(2) Where the gross amount charged by a service provider, for the service provided or to be provided is inclusive of service tax payable, the value of such taxable service shall be such amount as, with the addition of tax payable, is equal to the gross amount charged.
(3) The gross amount charged for the taxable service shall include any amount received towards the taxable service before, during or after provision of such service.
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