Service tax exemption

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.

Replies (4)
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
ST =500000×114.5/14.5 = Rs 63319
Originally posted by : Gagarwal
ST =500000×114.5/14.5 = Rs 63319

Thank u Gagarwal.

 

I am also of the Same view.

Correct view.., go with above calculation..

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