Service tax exemption

CA Bijay Shrestha (Never Give up....No matter what....)   (858 Points)

16 October 2016  

A company incorporated in FY 2014-15 and is providing service in FY 2014-15 for Rs. 9,50,000/-. Here the Company has not collected service tax from customers. Now in FY 2014-15, the Company has to register for Service tax and can claim exemption upto Rs. 10 Lakhs.

In FY 2015-16, The Company has provided services for Rs. 15 Lakhs. also not collected any Service Tax. Now the Company can claim exemption upto Rs. 10 Lakhs and pay service tax on Rs. 5 Lakhs. here the company has not collected any service  tax.

 

So my query is whether the Company has to collect Service tax from customers of Rs. 5 Lakhs and pay to the Govt. or if the Customers do not agree to pay ST , then the Company has to pay from own pocket or Rs. 5 lakhs is considered to be inclusive of Service tax and make back calculation and pay service tax i.e Rs. 5 lakhs * 14.5/114.5 i.e. Rs. 63,319/- Service tax???

Please share your views friends.