Facts of Case 1:
Assessee: A co-op bank
Purchase of Software by bank in FY 2008-09 & FY 2009-10 of Rs 2756000 (Basic Cost 2650000+ MVAT 106000) Payment of Rs 2756000 made in FY 2008-09 & 09-10 without deducting tax.
Bill was raised by the vendor company (say XYZ Ltd) for Rs 2756000 in FY 2008-09 & FY 2009-10 without levying Service tax because XYZ Ltd thought that their software sale was not covered under Service tax ambit.
However service tax department raised a demand on XYZ ltd for paying service tax on all invoices raised during that period saying that its software sale is covered as INFORMATION TECHNOLOGY SOFTWARE SERVICES u/s Section 65 (105) (zzzze) of Finance Act, 1994 as amended w.e.f. 16.05.2008 vide Notification No. 18/2008- S.T., dated 10.05.2008.
Hence XYZ ltd is raising a debit note in FY 2014-15 for service tax amount which comes to Rs 301790/- as per rates applicable on the dates of invoices.
Query:
1.Whether bank was liable to deduct tax at source on Rs 2756000 while making payment in FY 2008-09 & 2009-10?
2. Whether Input credit will be available if Service tax is paid in FY 2014-15 after receiving debit note for service tax?
3.Whether TDS will be applicable in FY 2014-15 on this payment of service tax of Rs 301790?
4.In FY 2014-15 if tds is applicable then on what amount...
a) on entire Rs 3057790 (2756000+301790)
b) on Rs 2756000 (excluding service tax as per CIRCULAR NO. 1/2014 [F.NO.275/59/2012-IT(B)], DATED 13-1-2014)
c) on 301790 (only on service tax amount)
CASE 2
Bank is a member of an association for which membership fees is paid annually
that association is sending fresh demand of service tax on the membership fees for FY 2012-13 & 13-14 in FY 2014-15
Query:
1. whether service tax can be levied on annual membership fees
2. whether tds is applicable now in FY 2014-15 on membership fees pertaining to FY 2012-13 & 13-14 because of levy of service tax?
3. if yes under which section.. 194C or 194J??
Kindly reply asap... very urgent
CAclubindia
