Service Tax on Associated Enterprises

i have a query .Pl guide me in this issue.. there r 2 company A and B who r associated enterprises. Company A gives loan to comp B on 1.1.2007 . Later on 10.8.2008 comp B provides services to comp A. The loan amount is to be adjusted for te service provided. Now when is the taxable event? There r 2 possibilities (1) When the loan is given( since as per notification on Service Tax on associated enterprise10-05.2008) . But wen thr is no taxable service hw service tax il be applicable? (2)On book entry made for adjusting the laqon against service..but wat if the book entry is not made? Pl guide me

Replies (1)

When service is provided, that is the taxable event. Service tax payment should be made when amount is adjudted from the loan amount.

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