service tax quarries

 
I have some problem regarding service tax.
 
One of my client is a private limited company, say A Pvt. Ltd., providing engineering consulting service to its clients.
 
X Ltd., a client of A Pvt. Ltd., is using this service as an input service for the service provided by it to its clients and charging service tax on it from its client.
 
Here the problem is :
 
1         A Pvt. Ltd. has charged service tax on service provided by it to X Ltd. But X Ltd. replied that it is not liable to be charged service tax  saying that as X Ltd. has recovered whole service tax from its client and paid whole amount to service tax department. X Ltd. is ready to issue a certificate for the same matter to A Pvt. Ltd.
 
            So, whether the stand of X Ltd. is correct?   What will A Pvt. Ltd. have to do to safeguard its position?   Is there any provision / notifications / circulars on this matter?   If yes, than please specify.
 
2        In the same situation as above, another company Y Ltd. is paying service tax to A Pvt. Ltd. and claims this service tax as input credit.
 
           So, whether is there any adverse effect to A Pvt. Ltd. if it will charge service tax from one client and will not charge service tax from other client?   What is the right way for A Pvt. Ltd?
 
I kindly request you to provide me your helpful guidance on above problems.
 
Thanking you,
 
Yours truly,
 
CA. Deepak Patel
Dholka
Gujarat
98984-66115

From your query it appears that 'X' is also a taxable service provider and they are confusing between their service tax liability for the service provided by them with the service tax charged by 'A', which is not correct. The certificate issued by them would be of no help to 'A'. As the payment has already been recived by 'A' against provision of taxble service provide, the amount received should be treated as price cum duty and accordingly the serice tax liability should be arrived at.

i have small query regarding applicability of service tax and its classification
I myself an articled student
one of my client is an authorised agent for selling of " coin phone boxes"
He has been already registered with the ST Dept as his taxable service as "Business auxillary service"
My doubt is that how come his service is covered under " Business auxillary service "
and please provide me the relevant rules and laws
ie., statutory applicability and exemptions and exclusions if any
Looking for the reply............

If he is working as a Commission Agent, then it is correct for him to be registered under Business Auxiliary Service.Sec 65(19) of Ch V of F.A, 1994 may be referred to.