Urgent.....plzzz help

579 views

Save Share

Priya Sharma

Company Secretary & Student.MBA

558 Points Posted on 06 January 2010

Hiii everybody

One of the Service Provider has developed online cinema tickets booking services online,say A(Service Provider). Now A is providing services to Theatre B for assisting in the online booking of tickets.

The actual price of the ticket is Rs. 50/-per ticket.Now when the tickets are sold online, it costs Rs. 60/- to the viewers.This Rs.10/- is the service charge charged by A, the service provider, which is to be paid by B, the theatre owner.

Out of Rs. 10/- the Service Provider will keep Rs. 7 and give away Rs. 3 to the Theatre owner.

Now my query is on what amount, the Service Tax should be charged???On Rs. 7/- or on Rs. 10/-???

Kindly suggest, its urgent.

Regards

Priya Sharma

Replies (4)

Rahul

CA Practice

1275 Points Posted on 06 January 2010

Its a good query, i m not able to judge that under which service it will fall. Business Auxiliary or business support

Amir

Learner

4898 Points Posted on 06 January 2010

Dear Priya,

Generally, Service tax is charged on GROSS AMOUNT, therfore it would be on Rs. 10..

Please clarify what kind of payment is Rs. 3 ??

Priya Sharma

Company Secretary & Student.MBA

558 Points Posted on 06 January 2010

It is in the nature of revenue sharing.

Amir

Learner

4898 Points Posted on 06 January 2010

Dear Priya,

If it is revenue sharing contract then don't u thing the better way is to GET Rs. 7 Rather than Rs. 10 AND PAYING Rs. 3..

MAKE A SIMPLE CONTRACT OF NET AMOUNT (Rs. 7) THIS WILL FACILITATE NOT ONLY COMPLIANCE OF THE CONTRACT BUT ALSO LEGAL COMPLIANCES.(LIKE SERVICE TAX ETC)