Service tax on whole amount or the amount minus the expenses

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NIK

MLSI

32 Points Posted on 03 July 2012

Hi guys.

i just watned to ask if the service tax will be calculated in the whole amount of payment to be recived or do we minus the expenses of a service provider.

For example if the total payment coming in is £ 100.00

ANd the service provider has incurred £ 80.00 worth of expenses in providing this service.

would the whole £ 100.00 be taken into considerstaion for service tax?

Would the £ 20 would be considered for service tax?

Replies (6)

Ajit kumar Dubey

Taxation Manager

797 Points Posted on 03 July 2012

Service tax is to be paid on the value of service provided but for import of services, it is the amount of money paid converted with the exchange ratio provided by the Customs Authority and not of in any other ratio.

Parihar Gopal

Corporate Taxation

316 Points Posted on 03 July 2012

The Service providor will charge service tax on whole amount & must have take cenvet invoice for expenditure incured for providing the service & can avail the benefit for the payment of service tax

sriraghavan

nothing

27 Points Posted on 03 July 2012

Genrally the service tax is charged on the amount placed in invoice, however if there is no any specific abatement available to the particular service which is provided. So service tax is attracted on 100 and not on 20 . So it is chargeable on the taxable amount and not after considering the expenses. But if the expenses incurred by the service provider includes the payment of service tax to such other person while providing the service then it can be claimed as CENVAT credit and be adjusted with service tax payable amount.

Neha sharma

983 Points Posted on 03 July 2012

service tax would be payable on the whole amount..

Mukesh Kumar Singh

CA-FINAL

3582 Points Posted on 04 July 2012

Originally posted by : sriraghavan
	Genrally the service tax is charged on the amount placed in invoice, however if there is no any specific abatement available to the particular service which is provided. So service tax is attracted on 100 and not on 20 . So it is chargeable on the taxable amount and not after considering the expenses. But if the expenses incurred by the service provider includes the payment of service tax to such other person while providing the service then it can be claimed as CENVAT credit and be adjusted with service tax payable amount.

Agreed,

CA sawan kumar

senior associate

146 Points Posted on 04 July 2012

Service Tax is a tax on the value of services given or received which includes the expenses incurred in providing the said service. Hence service tax would be payable on full amount.