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Service Tax : Consultants

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THOMAS

Article assistant

23 Points Posted on 09 February 2008

Hi,

During the course of audit of an FM radio Station it was noticed that a consultant earning in excess of 10lacs p.a was not being paid servicee tax.When we enquired the management told that they did not pay as the consultant did have service tax registration and hence was not billing them.Is the company liable to remitt service tax even though the same was not paid to the client.

Thanks,
Thomas; Article Assistant
Bangalore

Replies (1)

Late CA Sampat Jain

Chartered Accountant

4609 Points Posted on 10 February 2008

The liability to pay service tax is on the service provider . The terms of service with the service providee will decide wether service tax is to be paid separately or the price is inclusive of service tax . If it is silent about separarte payemnt of service tax , service providee can assume that the the price is inclusive is service tax .........CHECK OUT YOUR FACTS . THE FACT THAT SERVICE PROVIDER IS REGD OR NOT WILL NOT MAKE A DIFFERECE. THIS IS BECAUSE LIABILITY TO PAY SERVICE TAX ARISE ON PROVDIING SERVICE AND NOT ON REGN