Service tax exemption

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Never Give up....No matter what....
858 Points Joined April 2013

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.

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On 16 October 2016 at 15:15 Report
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Chartered Accountant
200 Points Joined September 2011
If Company have not collected ST from customer & also it's not looking feasible to collect ST from customer as in the above case than Grossing up is done and ST is calculated as 5 Lac also includes ST
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On 16 October 2016 at 17:26
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Chartered Accountant
200 Points Joined September 2011
ST =500000×114.5/14.5 = Rs 63319
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On 16 October 2016 at 17:27
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Never Give up....No matter what....
858 Points Joined April 2013
Originally posted by : Gagarwal
ST =500000×114.5/14.5 = Rs 63319

Thank u Gagarwal.

 

I am also of the Same view.

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On 16 October 2016 at 17:31
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Self Employed
81 Points Joined May 2012

Correct view.., go with above calculation..

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On 17 October 2016 at 22:17


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