Service Tax Payment on the Transactino between the Inter-Co

Service Tax is applicable between inter group companies.

Service Tax is not applicable only when the transaction is between branches of the same company. However, it is specified in Service Tax that for service recepient paying against import of services, foreign branch of Indian company, firm or individual will be treated as separate entities.

Mahendra,

As per explanation to 67of the Finance Act, 1994 service tax in case of inter-company  (associated enterprise) will  be payable on accrual basis. 

Please refer  Circular No. 334/1/2008-TRU dated 29.2.2008  

Regards

Sameer

Dear Sameer,

If suppose in the inter group co. transaction the company raise the Proforma Invoice for the advance purpose and the company received the advance so at that time he has to pay the tax or not or on raising of final invoice after giving the service.

Mahendra,

After 13.05.2005 service tax will be payable as soon as advance is received, even if service is provided later - view confirmed in MF (DR) circular No. B1/6/2005- TRU dated 27.07.2005.

Please note upto 13.05.2005, the provision was that service tax was payable only when service is actually provided.

Service Invoice under rule 4A, is required to be raised,  even when advance is received, Cenvat Credit of service tax will only be available on the strenght of this invoice only.  

Regards

Sameer

Halooo Sameer Sir

 As service tax is payble on a acrual basis in case service provided to the group company.

Sir can you please give the referance of the circular regarding this if any

Thanks & Regards

Vivek