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Service tax rates

tirtha raj tamang (article assistant) (66 Points)

07 May 2014

Dear sir, I am article assistant.During audit, I found that advertising agency is issuing bill to my client with service tax @ 1.854%.Does it have any impacts in my query since st should be @ 12.36% rather than 1.854%?

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9 Replies

Harendra Kumar (Tax Advisor ) (1326 Points)
Replied 07 May 2014

Sir,

Recently case law forward to you.

tirtha raj tamang (article assistant) (66 Points)
Replied 07 May 2014

I am not getting you sir, pls can u suggest me in more favourable way?

Harendra Kumar (Tax Advisor ) (1326 Points)
Replied 07 May 2014

Sir,

It is fully taxable services. I d'nt know why raised s.t @ 1.854. For further clearification plz forward the bill formate i.e. Service provider & receiver name, value % S.Tax and clear the any notification mentioned by him.

I search very carefuly but not trased the resulty in this regard

1 Like

JMS (DY.MANAGER -COMMERCIAL) (110 Points)
Replied 07 May 2014

It would mean that the method of calculation is taken place on the amount excluding commission charged @ 15%. See below Illustration:

9000
166.86	At 1.854%	direct @ 1.854%
1350	AT 12.36% after commissioner @ 15%
166.86

Regards,

JMS

1 Like

namrata rane (udc) (66 Points)
Replied 07 May 2014

Hey...how its after commission. ..it is charged on commission is it?

JMS (DY.MANAGER -COMMERCIAL) (110 Points)
Replied 07 May 2014

He asked only the method of calculation of tax of which charging directly on gross amount. I have explained how it has calculated by his agency and shown equalence of both method. U need to get that calculation method. Raising bills by Ad agency on their own and whatever they take method of calculation should be equal of tax liability.

Regards,

JMS

Anandakrishnan V, Chengannur (Sr.Accountant ) (52 Points)
Replied 08 May 2014

15 % is commision on Advertisment amount, Service Tax attract only this portion 15 % of total amount

Service Tax including EC & SHEC is 12.36% ie 15*12.36% =1.854%

arunsrivastava (ACCOUNTS MANAGER) (106 Points)
Replied 08 May 2014

Now Clear....

Can Any body tell me more exple like that type of srvc proydr but not same..

tirtha raj tamang (article assistant) (66 Points)
Replied 26 May 2014

Dear Sir,
During Audit,I found that Standard Agency Commission @ 15% has been deducted in Advertisement Bill and again same amount has been added by the name Actual Agency Commission.Since there is no any impact in total amount,what is the relevance of this deduction and addition of commission?