Service tax applicability on commission on surety bond

[Ganeshan Kalyani]

Dear Sir,

I would like to have clarification regarding service tax applicability on commission income received for giving surety bond.

Secondly, as a service provider whether booking of receivable is the point where service tax to be discharged or receipt of income is the point of tax to be discharged to government treasury.

kindly clarify.

regards,

ganeshan

[Madhukar N Hiregange]

Liability on the commission as it is an activity for a consideration not in negative list or exempted.

For point of taxation - please read an article on the topic.

AI Summary

Service tax on commission for surety bonds is taxable where not covered by the negative list; timing of tax remains separately addressed. Service tax liability arises on commission received for issuing a surety bond because the receipt constitutes an activity for consideration that is neither included in the negative list nor specifically exempted. The respondent did not definitively answer the point of taxation (booking versus receipt) and referred the inquirer to a separate article addressing timing.