Service tax for teachers/trainers

1-   Service tax on Commercial Coaching Centres and Tutorials service was made taxable w.e.f.01.07.2003. in your case you are liable to pay service tax on the amount over and above threshold exemption limit i.e. Rs.10 lcas. Pls note that if you have crossed the exemption limit in the previous F.Y. you will not be entitled for the exemption of Rs.10 under notification No.06/2005-ST.

2- You can also claim exemption under notification No.12/2003-ST of value of material sold/supplied by you during the course of providing services.

Exp. suppose you receive Rs.12,00,000/- (Rs.150000 of study material) in the current F.Y. and value of taxable service was less than Rs.10 lacs.

calculation of service tax payable

1- [(1200000-150000)-1000000]/110.30% = 45331 (value of taxable services on the ST is payable)

and service tax on Rs.45331/- will be = 45331*10.30% = 4669/-

If you have any query pls feel free to ask or send mail at jschauhan87 @ gmail.com 

Appropriate Answer.

Thanks Mr. Jogendra

Dear Sir(Mr. Jogendra),

Thanks for your kind reply. I have some more queries also.

1. I am not charging/asking my client to pay service tax, so should i start asking them to pay me service tax .. or can they give service tax to me on my previous payment also. as they have already taken the service tax from students.

2. Should TDS to be subtracted will calculating Service tax liability. The client is giving me 90% of my contract amount( if contract is of Rs. 15 Lacs, I am getting Rs. 13.5 Lacs), So that basis, how to calculate service tax.

3. In the new contract(from now onwards), should i charge Service tax, so that it is easy for me to pay that tax.

4. Should my account needs to be audited by my CA,( For Income tax purpose also), as the receiable amount is crossing Rs. 10 Lacs.

Dear Mr. Pankaj,

You need to call me to explain your transtion, I think service tax will not be applicable on you.

4) there is no need to be audited your account by C.A., as in income tax the limit of audit of account is far away from the Rs.10 lacs.

Hi Pankaj,

The law is this. If in the previous year u have your reciepts crossed Rs. 10 lacs, then in this year u hv to charge ST on every reciept.

Now it looks that this is the first year in your case., Hence u should register with the ST dept. as sooon as ur reciepts exceed 9 lacs. But start charging ST on ur reciepts in your invoice only when ur receitps exceed Rs. 10 lacs. That is ST is liable to be deposited in excess of amount of Rs. 10 lacs. in this yr. So hence forth, u need to collect ST invoice that u raises.

U don't need to collect any ST on prevoius recpeits. i.e. below 10 lacs receipts.

Secondly, u can register with the ST dept. on ur individual name. U don't need to be a corporate to get urself registered. U can register as a proprietorship concern. In column (3), u can tick 'Proprietorship'.

Thirdly, as far as income tax is concerned. U need to maintain ur proper books of accounts as being a professional, ur income exceeds Rs. 1.2 lacs or gross reciepts exceeds Rs. 10 lacs.

But Audit is compulsory only if it exceeds Rs. 15 lacs.!!!

Forthly, TDS is not to be subtracted whiel calculating ST liability. It 'll be subtracted while u 'll pay tax on ur income. for this, the payer will issue a TDS certificate.

For more clarity, kindly get in touch with a Finance professiional to so that u can get to know the exact amount of ST to be charged or the value on which it is to be charged by showing adequate documents as it'll be dangeruos to guide you for valuation of service merely on basisi of query with seeing actual transaction and documentation.

Deear Mr. Pankaj.

You need not to pay service tax 

As discussed you are hired by a Commercial training or coaching centre.

As per Section 65(26) of the Finance Act,1994 defines Commercial traning or coaching as under: -

"commercial training or coaching'' means any training or coaching provided by a commercial training or coaching centre" .

So Mr. pankaj if you run your own coaching or traning centre then you are liable to pay service tax in your case you are not providing services of commercial training or coaching.

therefore from the above definition given in above mentioned Section of Finance Act, your company who is running couaching or traning centre is liable to pay tax and not you.

The concept behind it is that the service provider is liable to pay service tax. In the definition of commercial traning or coaching service the service provider is who is running such centre.